Discussion Reply- Response 1-2 paragraphs with 1-2 references discussion shonda

Capital budgeting also referred to as Investment Appraisal can be defined as a step by step process that businesses use to determine the merits of an investment project. Capital budgeting helps a business to see into the future and figure out the profitability of a long-term investment. The decision to whether accept or reject an investment project involves determining the investment rate of return that such a project will generate. However, what rate of return is deemed acceptable or unacceptable is influenced by other factors as well that are specific to the company as well as the project (Thompson,2018).  

Capital budgeting is important because it creates accountability and measurability both at the same time. It is a measurable way for businesses to determine the long-term economic and financial profitability of any investment project. If any Company decides to invest in a project without understanding the risks and returns involved in it, it would be held as irresponsible by its owners or shareholders. The Capital Budgeting is also important to a Company as it creates a structured step by step process that enables a company to 1) Develop and formulate its long-term strategic goals to plan out its future long-term direction. 2) Find out which new investment projects it could undertake to compete against its rivals and make profits. 3) Estimate its future cash flows it would be able to achieve. 4) Monitoring and making efforts to control its Expenditure. 5) Make a quick decision to accept or reject a project (Wilkinson, 2013).

The more competitive a company wants to be, the more precisely it must capitalize on investment opportunities, and do so with extremely minimal margins of error (Quantumfbi. 2017). Therefore, it could be clearly seen that unlike other business decisions that involve only a singular aspect of a business, a capital budgeting decision involves two most important decisions at the same time such as financial decisions and investment decisions. In addition to a financial decision taken by the company it is also making an investment in its future direction and growth that will likely to have an influence on future projects that the company considers and evaluates. So it can be rightly said that capital budgeting process is the most important process that a firm undertakes because it has a major impact on which project or business a company chooses as it facilitates the appraisal and selection of the most viable investments which is so vital for the growth of the firm and the various stakeholders associated with it.

 

Quantumfbi, (2017). The Importance of Capital Budgeting. Retrieved from: www. https://quantumfbi.com

Thompson, J., (2018). What Is Capital Budgeting and Why Is It Important? Retrieved from: www.bizfluent.com

 

Wilkinson, J., (2013). Capital Budgeting Methods. Retrieve

Answers

Related Questions

Calculus 2...

You MUST show all work and use proper notation for full credit. Mysterious or unsupported answers will not receive full credit. Incorrect answers with...

Billing and coding...

DirectionsImagine that you are a coding supervisor and are training a coder who is new to your organization. While this new coder is experienced in ou...

Principal Diagnoses...

Based on the material presented in the Case Study of Bill:Provide the DSM-5 differential diagnoses for Bill, including a listing of "Other Factors," a...

I need a working bibliography and outline...

Working Bibliography: List 5 sources. Use MLA formatting for each source and include a brief summary of content beneath each source listing. Remember...

Risk Methodologies...

Respond to the following scenario with your thoughts, ideas, and comments. Be substantive and clear, and use research to reinforce your ideas. 6–12...

PowerPoint...

Describe the characteristics of highly successful startups.Analyze factors contributing to the success and failure of small businesses.Prompt:Review L...

Assignment...

The scenario:All That Glitter Jewelry is considering an expansion of the company website to sell more merchandise. Wanda Delana, US Sales Director, ha...

assignment...

Assigment APPLIED PSYCHOLOGY IN THE PROFESSIONS This assignment gives you the opportunity to take a deep dive into an area of applied psychology that...

Team Discussion...

175-350 words Describe the use of Business 2 Business (B2B) and Business 2 Consumer (B2C) in health care.As an individual, research the following and...

[Reflection Paper] Ghost Maps...

(Great English is a must!! No grammar errors!) (NOT a summary of the book) (MIN 4 Full Pages, APA Format) (You will find all the infos online) -------...

help with an assignment...

Explain ethics as they relate to government contracts and government contractors. Explain the general treatment of unallowable costs on billings, clai...

Help with assignment...

Read Part 9 Contractor Qualifications, located at Acquisition.govhttps://www.acquisition.gov/content/part-9-contractor-qualificationsPrompt:Use Part 9...

voluntary stuttering...

assignment is to call 2 different places and talk to a person and do a voluntary stuttering, how do you feel when you stutter? how did the other perso...

marcoeconomics writing, no Plagiarism...

This is a paper in Macro Economics and you may pick any topics covered in class but you are to research the topics beyond the book and cite your sourc...

Interview w/ it manager...

Complete an interview with an individual who is currently or formerly an IT manager. Consider interviewing an IT manager who does not work in your org...

c++ homework...

Read pp. 716 through 726 in our textbook and write a program using cin.get() and cin.eof() that reads a text file (.csv), one-character-at-a-time, and...

Contracts assignment...

For each of the following five questions, explain your answers in as much detail as possible. For each answer, state the law (including all of the rel...

Data Security...

Your complete section assignment submissions/posts for unit 5 must total, at least, 1,000 words and be sure to cite/reference your sources. Please be...

Lab analysis 2...

For K-323 here are the 2 parts needed. Notice that you do not need to submit purpose, procedures or data and observations or conclusions!1. Title page...

Present a short formal analysis of deChant’s P...

Paper should be at least 750 words and try to keep it under 1500 words.Present a short formal analysis of deChant’s Primer on Chapter 3 entitled, Se...

Research Paper on Internet of Things (IoT)...

The research paper must be at least 2,500 words supported by evidence (citations from peer-reviewed sources). Note: the research should be thorough an...

reflection paper...

Reflection Papers 4 pages minimum You will write about Ghost Maps. Reflection papers should be in first person voice (e.g. I felt, I thought, it remin...

Response paper-01-02...

Reading : https://www.theatlantic.com/magazine/archive/2008/...Writing requirement:WR 121: Response Paper #1For this assignment will write a summary o...

Response paper-01-01...

Reading : https://www.theatlantic.com/magazine/archive/2008/...Writing requirement: WR 121: Response Paper #1For this assignment will write a summary...

If you didn't find the right answer

Ask Your Questions, We'll notify you once someone answers it