Capital Budgeting

Capital Budgeting 
 • Capital Budgeting is a project selection exercise performed by the
     business enterprise.  

• Capital budgeting uses the concept of present value to select the projects.

 • Capital budgeting uses tools such as pay back period, net present
value, internal rate of return, profitability index to select projects.


Capital Budgeting Tools 

1. Payback Period 
2. Accounting Rate of Return 
3. Net Present Value 
4. Internal Rate of Return 
5. Profitability Index