Capital Budgeting

Report by Lallandra Jose and Kimberly Nana

Capital budgeting usually involves the calculation of each project's future accounting profit by period, the cash flow by period, the present value of the cash flows after considering the time value of money, the number of years it takes for a project's cash flow to pay back the initial cash investment, an assessment of risk, and other factors.

Reference: http://www.accountingcoach.com/blog/what-is-capital-budgeting

Factors Influencing Capital Budgeting:

Availability of funds Structure of capital Taxation Policy Government Policy Lending Policies of Financial Institutions Immediate need of the Project Earnings Capital Return Economic Value of the Project Working Capital Accounting Practice Trend of Earning Risk of the business Forecast of the market Political unrest Geographical Condition Exchange Rate of Currency

Methods in Capital Budgeting

In your case, how can you apply Capital Budgeting in your life today and in the future, when you already have your own jobs or businesses?

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