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Excel reportYour nameName of Assignment19th October , 2010| Outline Introduction Capital budgeting techniques Results Conclusion and tribute enumerate of References Introduction It is difficult to choose a watch even though it is the best preference among alternatives. In put up to decided to stick to the ending of investiture one should treasure utilise contrastive manners that atomic number 18 operable and methods greatly determine terminations taken. For instance, when using non-discounting methods of crown budgeting, succession range of money ignored whereas the discounted methods consider the time value of money. Thus, the select may lead to different answers using one method or the other. Most of these firms are facial gesture up with various decisions which require huge investment fundss of the companys funds. The decisions the firms smell include replacement decisions, expansions and diversification of operations. Any investment decision to be undertaken by a company will twist its growth in the short and long run as well as affect its riskiness. Capital investment judgement techniques have changed oer time because of various factors such as existence of multiple projects that are mutually exclusive, independent projects and potential investment.

Inflation rates and other complexities have made investment decision making or evaluation techniques change over time (OConnell, 1999). Capital budgeting techniques The three (3) primary methods of Capital Budgeting are the Discounted Methods, Non-Discounted Methods and the Equivalent Annuity Method (Book of Accounting, 2010). The Discounted Methods of Capital Budg eting are the profit Present Value method,! Profitability Index, Internal Rate of cramp and Present Value Payback Method. The Pros of using the Discounted Methods are accentuate the cash flows, recognizing the time value of money, assumes the discount rate as reinvestment rate and computing the real project return. The Cons of using the Discounted Methods are...If you motive to get a full essay, order it on our website: OrderEssay.net

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