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Capital Budgeting

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Capital budgeting
The process of choosing the firm's long-term assets.

Capital Budget
A plan for a company's capital expenditures. Capital expenditures are payments made over a period of more than one year. They are used to acquire assets or improve the useful life of existing assets; an example of a capital expenditure is the funding to construct a factory. Making a capital budget must account for the potential profitability of the plans involved. Calculating the net present value or the internal rate of return are two methods for determining a capital budget.

capital budgeting
Corporate evaluation of long-term investment proposals, generally by means of discounting estimated future cash flows.


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3) It also enhances awareness of the capital budgeting process and, therefore, leads to closer managerial control over the implementation of the capital budget.
95 Hardcover HG6042 This textbook for MBA students, advanced undergraduates, and practicing managers uses a series of examples and case studies to demonstrate the use of option pricing in capital budgeting processes.
Shapiro: Capital Budgeting and Investment Analysis, Upper Saddle River, NJ: Prentice Hall 2005.
 
 
 
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