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Topic to be tested:
Capital Budgeting and Methods of Project Evaluation

Learning Objectives:
 
To develop an understanding about the capital budgeting process and its contribution towards the worth of a company.



Discussion Question:
How can the overall worth of a company be enhanced through capital budgeting process? Discuss and support your comments with conceptual rationale.

Important Instructions:

1. Your discussion must be based on logical facts.

2. The GDB will remain open for 2 working days/ 48 hours.

3. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.

4. Obnoxious or ignoble answer should be strictly avoided.

5. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.

For Detailed Instructions please see the GDB Announcement.

Views: 1381

Replies to This Discussion

ÏŅVÏŅĊÏBĻË MÄŅÖ  aa ke a????????

net sy sara materil utha k idr rkh dia ha.ya koi idea ha?????????????

please share your ideas, net say copy na karen,,,,,,,,,,,,,,,

Muhammad Shahzad kro net sy copy but tori aql ar zhn sy bcz book main to itna materil ha he ni

wesay apnay kahan say copy kia,,,,,,,,,,

 net ar apny zhn sy

CB process helps us to select such projects that probably generate good returns and enable us to avoid allocating funds in wrong projects. There are many techniques we use in CB, by using them we can rank projects or opportunities.

Basically using of CB techniques (any one or mixture of more then one, you can describe them briefly) you can evaluate opportunities. This evaluation make you to select most favorable opportunity and this leads to enhancement of the worth of the company.

apny zehn say kya copy kia hay zara btana,,,,,,,,,,,,,,,,,,,

everything has a reason. so is capital budgeting and the reason is to enhance the returns on ur peculiar investment.. you have the authority to choose between alternative options for your project. the best project is the one which has the most return whether in short period or long period. capital budgeting is used for large projects worth more than 50 million and helps us evaluate the returns from the project after a specified time period... the more you invest the more is the risk.. and capital budgeting allows us to determine the benefits of the project and drawbacks as well

.... mega mind 

DEFINITION:

Capital budgeting is a process where companies evaluate major projects that may be worthy, long-term investments. 

Basically, the purpose of budgeting is to provide a forecast  of revenues and expenditures and construct a model of how business might perform financially.

Capital Budgeting is most involved in ranking projects and raising funds when long-term investment is taken into account.

Capital budgeting is an important task as large sums of money are involved and a long-term investment, once made, cannot be reversed without significant loss of invested capital.

The following capital budgeting techniques /methodsare  helpful in enhancing the worth of businesses/companies

METHODS OF CAPITAL BUDGETING:

  • NET PRESENT VALUE
  • INTERNAL RATE OF RETURN – IRR
  • PAYBACK PERIOD
  • DISCOUNTED PAYBACK PERIOD
  • ACCOUNTING RATE OF RETURN –ARR
  • PROFITABILITY INDEX

 in ko tora tora explain kr lena.

capital budgeting also helpfull in enhancing the worth of copmapy by providing the control resources,visibility,rank projects and raising funds.

lo maro hn copy paste ar get full marks

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