Capital budgeting decisions are among the most important decisions a business owner or manager will ever make. Which assets to invest in, which products to develop, which markets to enter, whether to ...

Capital budgeting encompasses the methods and techniques used by firms to evaluate long‐term investment projects and allocate resources effectively. Traditionally, discounted cash flow (DCF) ...

The net present value calculation is a popular method used by business managers to evaluate the profitability of different projects. It is easy to use but it also has certain limitations. Advantages ...

Net present value (NPV) represents the difference between the present value of cash inflows and outflows over a set time period. Knowing how to calculate net present value can be useful when choosing ...

This article reports the results of a national survey on the use of several capital budgeting decision models by county governments. Among the models examined, the benefit-cost ratio (BCR) and the ...

Capital budgeting frequently involves multiple stages at which firms can continue or abandon ongoing projects. In this paper, we study a project requiring two stages of investment. Failure to fund ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Budgeting for capital expenditures (CapEx) ...

Investment appraisal is a way that a business will assess the attractiveness of possible investments or projects based on the findings of several different capital budgeting and financing techniques.

Internal rate of return (IRR) is a capital budgeting measurement used by companies to determine the profitability of a potential investment or project based on predicted cashflows. The IRR formula is ...