Here is the synopsis of our sample research paper on The Tools of Capital Budgeting. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 7 page paper looks at their importance of capital budgeting and some of the tools which can be used in the process. Tools discussed include payback period, the accounting rate of return, net present value (NPV), the internal rate of return (IRR) and the profitability index. Consideration of the advantages and disadvantages of these different assessment methods is included in the discussion. The bibliography cites 6 sources.
Page Count:
7 pages (~225 words per page)
File: TS14_TEtoolCB.rtf
Buy This Term Paper »
Unformatted sample text from the term paper:
then a business needs to assess the way the resources are used to create that return. If the organization is non profit making there are likely to be issues of
accountability which will mean that there is a requirement for the resources to be utilized effectively (Migliore and Mccracken, 2001). This can be deemed as very important for operational issues,
but as capital decisions it can be critical. Making the wrong decision could be disastrous, tying up capital which cannot be used elsewhere incurring opportunity costs and possibly committing the
firm to further expenses (Nellis and Parker, 2000). The Institute of Cost Management Accountants describe a budget thus; "A financial and or/quantitative
statement prepared prior to a defined period of time, of the policy to be pursued during that period for the purpose of attaining a given objective. It may include income,
expenditure and the employment of capital" (Chadwick, 2001). Whilst this may refer to an on going project it may equally be important when considering capital expenditure. Therefore, it is a
predetermined plan that is used to determine the way a business uses its resources. This will also need to be controlled. Budgetary control is described by the same organization as;
"The establishment of budgets relating the responsibilities of the executives to the requirements of the policy, and by continuous comparison of actual with budgeted results either to secure by
individual action the objective of that policy or to provide a basis for its revision " (Chadwick, 2001). Therefore, the budget also needs to be related to the final objective,
and undergo revisions. Therefore the plan itself needs to be examined along with the potential return, it will also be necessary to compare
...