CAPITAL BUDGETING: ADVANTAGES AND LIMITATIONS. SEPTEMBER 2012 CHAPTER ONE INTRODUCTION 1.0 Background Study Capital budgeting is the process by which firms determine how to invest their capital. Included in this process are the decisions to invest in new projects, reassess the amount of capital already invested in existing projects, allocate and ration capital
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CHAPTER ONE INTRODUCTION 1.0 PREAMBLE One constant variable that permeates through man’s entire life is uncertainty. Uncertainty and man are inseparable. As man builds organizations and institutions that he utilizes to make his existence easier, uncertainties also creep into these organizations and institutions. All human transactions carry these uncertainty traits. These transactions are many and varied but arise essentially, as stated above, as inherently of man and the institution created
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TE AM FL Y THE JOSSEY-BASS Academic Administrator’s Guide to Budgets and Financial Management The Jossey-Bass Academic Administrator’s Guides are designed to help new and experienced campus professionals when a promotion or move brings on new responsibilities, new tasks, and new situations. Each book focuses on a single topic, exploring its application to the higher education setting. These real world guides provide advice about day-to-day responsibilities as well as an orientation to the
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BUDGETARY AND MANAGEMENT CONTROL PROCESS IN A MANUFACTURING: CASE OF GUINNESS NIGERIAN PLC. BY: AMALOKWU OBIAJULUM JOHN LAWRENCE NJILEFACK NGOASONG ABSTRACT Date Level Authors : : : June, 2008. Master Thesis EF0705, 10 points (15credits) Amalokwu Obiajulum John (820821) Lawrence Njilefack Ngoasong (770901) Title : Budgetary and Management control Process in a Manufacturing Organization. Roland Almqvist. What is the budgeting practice in the Nigerian Manufacturing companies? The aim of this
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Capital Budgeting Techniques | | GLOSSARY Capital Budget: (1) The amount of money set aside for the purchase of fixed assets (e.g., equipment, buildings, etc.). Also, (2) a request for authorization to purchase new fixed assets. Mutually Exclusive Proposals: Consideration of two or more assets that perform the same function. If one is chosen for purchase, the others are automatically rejected. Profitability Index: A ratio of the present value of the benefits (PVB) to the present value
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Course: Corporate Finance MBA−10 California College for Health Sciences MBA Program McGraw-Hill/Irwin abc McGraw−Hill Primis ISBN: 0−390−55204−6 Text: Harvard Business School Entrepreneurship Cases Corporate Finance, Seventh Edition Ross−Westerfield−Jaffe Harvard Business School Finance Cases This book was printed on recycled paper. Finance http://www.mhhe.com/primis/online/ Copyright ©2005 by The McGraw−Hill Companies, Inc. All rights reserved. Printed in the United States of America
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Phone: 312.362.8826 Office: Loop Campus tcarroll@depaul.edu Case Study Questions Capital Budgeting In Practice Ocean Carriers These questions relate to the Ocean Carriers case in your course packet. You can find the data for this case on the course website in a spreadsheet named: Ocean Carriers Exhibits.xls. This case provides the opportunity to make a capital budgeting decision by using discounted cash flow analysis to make an investment and corporate policy
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Introduction Capital budgeting is the decision-making process that establishes the goals and criteria for planning and investing a firm’s resources in fixed assets or long-term projects. Capital budgeting normally includes the evaluation of projects like land, building, facilities, equipment, vehicle fleets, and so on. Capital budgeting is important for the following reasons: 1. The size of the investments. As discussed throughout this book, the key function of a financial officer
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Capital Budgeting One of the most important decisions a financial manager can make involves capital budgeting. Capital budgeting is used to determine which fixed assets should be purchased. The purchasing of fixed assets is a form of a long-term investment. Allocating funds in the capital account is a form of capital budgeting. A financial manager will determine if the purchase of a capital asset or fixed asset is worth more over that assets life then it is for the cost to purchase it. In other
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Fundamentals of Capital Budgeting Learning Objectives 1. Discuss why capital budgeting decisions are the most important decisions made by a firm’s management. 2. Explain the benefits of using the net present value (NPV) method to analyze capital expenditure decisions, and be able to calculate the NPV for a capital project. 3. Describe the strengths and weaknesses of the payback period as a capital expenditure decision-making tool, and be able to compute the payback period for a capital project
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