Executive summary
In this report, we will discuss about the capital budgeting of CapitaLand, one of the largest real estate companies in Asia. Business activities and financial background of CapitaLand will be mentioned in this report, also with the evaluation of two potential mutually exclusive capital investments as well as the objective of these investments for this company.
This report also contents the analysis of four main different capital budgeting techniques used in the investments for supporting decision making process. Definition, formula of each technique will be given along with the figure of the investments as well as its advantages and disadvantages. The numeric data (initial investment, cash flows…) used for the calculating process will be disguised by our group.
Recommendations and Suggestions will be given based on the analytic figure before having the final decision of which project will be chosen. 1. INTRODUCTION
Capital Budgeting is the process of analyzing a company’s investible decisions in which the company determines if the projects are worth pursuing and will yield the most return over an applicable period of time. The investments can be purchasing new machinery, replacement machinery, new plants, new products, or research development projects.
Select an effective and profitable investment is one of the most important of the financial management of an organization, moreover, having a suitable choice of investment helps the organization to stay competitive and take advantages over other competitors. Hence, capital budgeting is one of the most important step to evaluate the opportunity before making the final decision of which investment will be chosen.
1.1 CapitaLand Organization
1.1.1 Introduction
CapitaLand limited is one of the largest real estate companies of Asia. The main business activities of CapitaLand includes real