Everything you need to know about capital budgeting methods. Some of the capital budgeting methods are:- 1.Traditional Methods 2.Modern Methods 1. Traditional methods includes: a.Payback Period Method (PBP) and Its Variants - Post back period, Post payback profitability method, Discounted payback period b.Accounting Rate of Return Method (ARR) 2. Modern methods includes: a.Net Present Value (NPV) b.Profitability Index (PI) or [...]
Capital budgeting is a process which helps enterprises in examining the financial implications of the long term investment projects. The decision of accepting or rejecting an investment project as part of a company's policy depends upon the investment rate of return that such a project will generate. Capital budgeting is the process of evaluating and selecting investments in capital assets [...]
The term 'Capital Structure' refers to the proportion between the various long-term sources of finance in the total capital of the firm. The major sources of long-term finance include 'Proprietor's Funds' and 'Borrowed Funds'. "Capital structure is the makeup of a firm's capitalization i.e. it represents the mix of different sources of long term funds in the total capitalization of [...]