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Financial Management
Capital Budgeting
| Question | Answer |
|---|---|
| What is Capital Budgeting? | Capital Budgeting is a Technique in Financial Management, for taking Long Term Investment Decisions |
| What are the Techniques in Capital Budgeting? | There are mainly two kinds of Techniques in Capital Budgeting Discounted and Non Discounted Techniques |
| What is Discounted Techniques? | Discounted Techniques uses the Time Value of Money Approach, Methods used are Net Present Value Method Internal Rate of Return Method and Profitability Index |
| What is Non Discounted Technique? | Non-Discounted Technique Ignores the Time Value of Money Factor and the Method Used are Average Rate of Return Pay Back Period |
| What Information is Required for Discounted Technique of Capital Budgeting? | Cash Outflows Cash Inflows Working Capital Depreciation Tax Rate Cash Flows After Taxes CFAT |