PH3 (DB)In 800 words using APA style.and at least 3 referencesBased on the information provided on...

Question

PH3 (DB)In 800 words using APA style.and at least 3 referencesBased on the information provided on SAC in the Phase 3 Individual Project:
Compare and contrast the following methods of evaluating capital projects: 
NPVIRRProfitability IndexPayback MethodDiscuss the effect of a volume increase in sales, a price increase in sales, and a cost decrease on the net operating income.

Robert · Accepted Answer

Introduction 
There are certain decisions which are to be taken by the newly established firms such as 
selection of the plant and machinery, which is to be installed and decision regarding the capacity 
utilization at initial stages. On the other hand, an established firm is also required to take various 
decisions so as to survive in the dynamic and competitive business environment. These decisions 
can be:- 
 Replacement and Modernization Decision 
 Expansion 
 Diversification 
The process by which the firm is able to invest the funds efficiently in long term activities in 
expectation of the flow of the future benefits over a period of time is called as Capital Budgeting. 
Capital Budgeting techniques is a tool which helps in analyzing and evaluating the projects from 
different perspectives such as predicting the outcome of accepting the project, other engineering 
and market considerations associated with the project etc. 
Thus, the basic features of capital budgeting techniques can be summarized as follows: 
 Present available funds are exchanged for the future benefits. 
 Long term investment in projects. 
 Series of benefits which accrue in future. 
Essentials of Capital Budgeting Decisions 
An investment project generates cash flows which must be incorporated by the capital budgeting 
techniques. An accurate decision should also incorporate the time value money approach. 
Different proposals should be ranked according to their worth with the help of capital budgeting. 
All the decisions should be objective,

PH3 (DB) In 800 words using APA style.and at least 3 references Based on the information provided on SAC in the Phase 3 Individual Project: Compare and contrast the following methods of evaluating...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment