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Phases of capital budgeting?
- 1. Planning
- 2. Analysis
- 3. Selection
- 4. Financing
- 5. Implementing
- 6. Review
Importance of capital investment decisions?
- 1. Long term effect
- 2. Irreversibilty
- 3. Substantial outlay
- 4. Risk
- 5. Growth
- 6. National Economy
- 7. Complex
Difficulties in capital investment decisions?
- 1. Measurement problems
- 3.Temporal Spread
Aspects of project analysis?
- Market Analysis (Potential Market, Market share, trend of business)
- Technical Analysis (technical viability, Sensible choices)
- Financial anaysis (Risk, Return)
- Economic Analysis (Benefits and cost of shadow price)
- Environmental Analysis (environmental damage, restoration measures)
Types of capital investments?
- Physical Assets,Monetary Assets, Intangible AssetsStrategic, tacticalMandatory, expansion, replacement, diversification, R&D, Miscellaneous
Process of feasibility study?
- 1. Generation of idea
- 2.Initial Screening
- 3. Is the idea prima face promising?
- 3.1 yes: Plan feasibilty analysis
- 3.1.1 Conduct market analysis
- Conduct technical analysis
- conduct eco. n envn analysis
- Is project worthwhile?
- . yes: prepare funding proposal
- . no: termnate
- 3.2 no: terminate
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