Features of capital budgeting decisions, Financial Management

Assignment Help:

Features of Capital Budgeting Decisions

1.       Existence of potentially large anticipated profits.

2.       Involves a comparatively high degree of risk

3.       Existence of a relatively long time period between the initial outlay and the anticipated returns

4.       Usually they are irreversible without incurring loss

5.       They involve large volume of capital

6.       They are strategic investment decisions and involve blocking of funds for long term and inevitably affect the firm's future cost structure

7.       They affect the profitability of a firm

8.       They have a bearing on the competitive position of the firm essentially because of the fact that they relate to fixed assets, which in a sense are the earning assets of the firm

9.       Cash flow and not profit are essential in investment decisions


Related Discussions:- Features of capital budgeting decisions

Illustrate the steps of creative accounting, Illustrate the steps of Creati...

Illustrate the steps of Creative accounting Creative accounting include: 1 Timing of transactions. Delaying or hurrying up the despatch of invoices at the yearend to decr

Describes the certainty equivalent coefficient method, Q. Describes the Cer...

Q. Describes the Certainty Equivalent Coefficient Method? Introduction: - Certainty equivalent coefficient process which makes adjustment against risk in the estimates of futur

Capital investment plans , Report based on Capital Investment Plans   ...

Report based on Capital Investment Plans   To analyze the capital investment plans of Hatsun Agro Products Limited (HAPL) we shall look at the capital expenditure of HAPL in

Explain the dividends and interest payments, Dividends and interest payment...

Dividends and interest payments Payment  of  dividends  and  interest  can  either  be  demonstrated under financing activities or  under operating activities. Sum of the 3

What is lending system, Q. What is Lending System? Under the note lendi...

Q. What is Lending System? Under the note lending system, the borrower takes a loan, usually of 90 days Duration, against a promissory note. The loan may be renewed or retired

Stripped mortgage-backed securities , These securities aid in unpacki...

These securities aid in unpacking the cash flows from a pass-through. The most uncomplicated stripped mortgage-backed securities are the PO-IO-security. Unlike a

What is the modigliani and miller theory of dividends, What is the Modiglia...

What is the Modigliani and Miller theory of dividends?  Explain. The Modigliani-Miller theory of dividends says so as dividend theory is irrelevant.  They claim so as to it is

Explain the reconstruction and effect on share price, Reconstruction and ef...

Reconstruction and effect on share price A listed company facing reconstruction (divestment, demerger, MBO etc) will have informed the stock market in advance and the share pri

Treasury auction process, All treasury securities are issued on the b...

All treasury securities are issued on the basis of auction. The auction process is computerized and hence qualified broker-dealers can access it electronically. T

Explain about the investment decision- financial management, Explain about ...

Explain about the investment decision- financial management The investment decision relates to selection of assets in which funds would be invested by a firm. Assets which can

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd