Kinds Of Capital Budgeting Decisions

1 accept reject decisions.

Kinds of capital budgeting decisions.

This objective can be achieved either by increasing the revenues or by reducing costs. Read this article to learn about the three important kinds of capital budgeting decisions. These are the decisions which compete with each other which mean the. Let us make an in depth study of the kinds and planning period of capital budgeting decisions.

Since capital budgeting includes the process of generating evaluating selecting and following up on capital expenditure alternatives allocation of financial resources should be made by the firm to its new investment projects in the most efficient manner. All the investment decisions which give more return than the cost of capital they are acceptable while the investment decisions which give less return than the cost of capital they are rejected. 2 mutually exclusive decisions. Thus firm will make investment only if the decision is acceptable.

Capital budgeting decision is a simple process in those firms where fund is not the. It includes all those projects which compete with each other in a way that acceptance of one precludes the acceptance of other or others thus some technique has to be used for selecting the best among all and eliminates other alternatives. Kinds of capital budgeting decisions.