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Essay Available:
Pages:
7 pages/β‰ˆ1925 words
Sources:
8 Sources
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 32.76
Topic:

Introduction Features of Capital Budgeting. Techniques

Essay Instructions:

Signature assignment is a formal academic research paper on a topic regarding Budgeting (Capital Budgeting). Write an APA style 8 – 10 page paper, with atleast 8 scholarly sources (references). Page count does not include the title page, table of contents, references, and any appendices.
The paper should be divided into the following sections: Table of contents (10% of total grade) Introduction (10% of total grade) The body (50% of total grade) Summary (10% of total grade) Conclusion (10% of total grade) References (10% of total grade)
Writing Guidelines:
Title page, table of contents, references, and any appendices page (not included in the 8 – 10 pages count).
Must be double-spaced with 1-inch margins and typed in 12-point Times New Roman
Paper should be proofread for spelling and grammar mistakes (Grammarly.com)
Paper should be in APA style
Please submit in a word document and NOT pdf version
You must cite and reference all texts used, including page numbers to avoid plagiarism
Your paper must have an introduction and conclusion paragraphs
You should use headings and subheadings to organize your paper
Use at least 8 scholarly or professional practitioner sources (references) in your paper
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Use the 8 SLOs mentioned below.
Attachments:
1. Module topics for the 8 modules and References used in each module.
2. APA formatted sample paper.
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SLO’s
SLO1: Identify capital budgeting techniques examining their effects on corporate strategy of investment selection.
SLO2: Examine how investment value is measured with consideration of capital rationing for capital budgeting.
SLO3: Analyze processes in foreign investments.
SLO4: Evaluate basic risk adjustment techniques in capital budgeting
SLO5: Measure risk management in project finance
SLO6: Formulate the concept of cost of capital
SLO7: Illustrate decision making using behavioral finance for capital budgeting
SLO8: Evaluate the ethical considerations in the practice of finance

Essay Sample Content Preview:

Capital Budgeting
Student’s Name
Institutional Affiliation
Course
Date
Content IntroductionFeatures of Capital BudgetingCapital Budgeting TechniquesCapital Budgeting DecisionsCapital Budgeting ProcessImportance of Capital BudgetingConclusion
Capital Budgeting
Introduction
Capital budgeting is an essential tool in finance. It is the formal process of a company that is used for assessment of the potential investments or expenditures that are large in amount. It consists of the choice to spend the existing assets for disposition, expansion replacement, change of the fixed resources. The considerable expenditure involves the acquisition of fixed resources such as new equipment, building, replacing, or rebuilding the existing equipment, land, innovative work, and many others. The amount spent on the purchase of these fixed assets is referred to as capital expense (Chicktay & Barnard, 2018). Capital expense is a tool that is used in the maximization of a company's ultimate gains because a company can deal with a predetermined number of large projects one after another. Capital budgeting entails count of every project’s ultimate bookkeeping gain by period, risk assessment, income by period, the number of years it will take for a project's income to return the initial capital invested and also the net current value of profits after consideration of the time estimation of cash and many other factors (Gokarn & Singh, 2014).
The success of any decision in capital budgeting depends on how the above factors have been appropriately assessed. Cashflow estimation requires a vast understanding of the project before implementation, particularly the company and polity, micro and macro perspective of the economy. Project life is essential that time should be taken in the estimation of project life. Capital budgeting helps a company in deciding whether it should invest in a particular project or it should not (Jain, Singh, & Yadav, 2013).
Features of capital budgeting
* Estimation of large profits
* In entails high risk
* A long period of time between the initial investments and estimated returns
Capital Budgeting Techniques
1 Payback Period (PBP)
The pay period is traditional, method of capital budgeting. It is the simplest method and also the most used quantitative technique for appraisal of capital expenditure decisions. It is defined as the number of years needed to recover the initial cash investment that was invested in the project. Where a project produces continuous yearly money inflows, the restitution time frame can be determined by dividing the first money expense by the annual money inflow (Joaquin, 2017).
Merits
* It is simple both in application and concept, and it is not difficult to calculate.
* It is a financially effective technique that requires less time for finance executives and computer usage.
* It is a method of liquidity as it entails the selection of a project with an early investment recovery.
* It is a technique of dealing with risk where the project can be taken care of by having a shorter compensation period.
Demerits
* It does not take into account the incomes earned after the payback time frame.
* It isn't a viable method...
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