Analysis on capital budgeting techniques

Now you got the critical details for evaluating the investment proposal.

That is ‘cash flows ‘.

Your decision depends on accuracy of these cash flows and now you have it right!

With this cash flow, we are going to use Capital Budgeting Techniques like

a) Payback period;

b) Discounted Payback Period;

c) Net Present Value Method;

d) Internal Rate of Return of Method;

e) Accounting / Average Rate of Return Method;

f) Profitability Index;

g) Modified Internal Rate of Return Method, etc.

to evaluate Investment Proposals.

We will also discuss how to select a project when there is a conflict between these methods and understand importance of Capital Budgeting Process.