Finance > Solutions Guide > Answer.pdf.pdf | Download for quality grades | (All)

Answer.pdf.pdf | Download for quality grades |

Document Content and Description Below

1. Capital Investment Project Report A systematic method used by an organization to determine its potential costs or investments is known as the capital budgeting of a company. It includes judgment... s about current funds for disposition, addition, replacement or modification of immovable assets. Some examples for capital expenditures are replacing existing equipment, purchase new equipment, research and development, purchasing land and building and likewise. The best tool to maximize its future profits over as above mentioned capital investment project is capital budgeting. The capital budgeting includes high risk, estimated large profits and Long time period between the initial investments and estimated returns as its features. It is not a single step and it carries larger process comprise with following steps. First step: Identification and generation of project Create an investment proposal is the first step of capital budgeting. They may be Nemours reasons for a business to execute this proposed investment like adding new product like or expanding the existing one. The proposal is about reducing the cost of output or improving its production. Second step: Screening and evaluation the project This step basically comprises selecting all relevant criteria’s to judge the quality of a proposal. This should coordinate with the objective of the firm. The time value of money is highly considered in this step. The net cash flows over the risks associated in the proposed project are systematically analyzed and allocate appropriate provisions in this stage. Third step: Project Selection [Show More]

Last updated: 2 years ago

Preview 1 out of 18 pages

Buy Now

Instant download

We Accept: