Budgeting Decisions

This is a method through which a business regulates whether projects such as building a new plant or investing in a long-term venture are worth pursuing. Sometimes, a potential project’s lifetime cash inflows and outflows are evaluated in order to determine whether the returns generated meet a adequate target standard.

Capital Budgeting Decisions

Learning Objectives: Evaluate the acceptability of an investment project using the net present value method. Evaluate the acceptability of an investment project using the internal rate of return method. Evaluate an investment project that has uncertain cash flows. Rank investment projects in order of