Capital Budgeting

Capital Budgeting

Introduction

Capital budgeting is about making decision of either accepting or rejecting an investment project. Feasibility of the project is evaluated to ensure that the company will generate sufficient cash flows that will be able to maximize shareholder's wealth. It is important for managers to determine if the project will result in positive cash flows. However decision of managers is based on various analysis and rules. An approach to determine the feasibility of the project for business can be calculating the net present value of the project that tends to examine the future cash flows that are discounted at the ...