Ppt on main project in Capital Budgeting Topic In Tulasi Seeds Private Limited useful for MBA students Created by RAJESH GANDHAM

1. Prepared By
RAJESH GANDHAM (PR)
CAPITAL BUDGETING
IN

2. Sri Tulasi Rama Chandra Prabhu

3. Sri. Tulasi Krishna Chaitanya

4.  Tulasi seeds pvt ltd
 Tulasi digital studios
 Tulasi filling system
 Tulasi technosoft pvt ltd
 Tulasi township pvt ltd
 Tulasiram chits pvt ltd
 Chandra transports
 Chaitanya packaging pvt ltd
 Coastal packaging’s
 Diehard dies pvt ltd
 Impec Soft solutions pvt ltd

8. Feedback
Performance Review
Implementing Proposals
Final Approval
Fixing Priorities
Evaluation of Various Proposals
Screening Proposals
Identification of Investment Proposals

9. Capital
Budgeting
Methods
Traditional
Methods
Payback
Period
Accounting
Rate of
Return
Modern
Methods
Net
Present
Value
Profitability
Index
Internal
Rate of
Return

10. A. IN THE CASE OF EVEN CASH FLOWS:
Initial Investment
Payback Period = -------------------------------
Annual Cash Inflows
B. IN THE CASE OF UNEVEN CASH INFLOWS
Required Cash Inflow After Tax
Payback Period = Base Year + ------------------------------------------
Next Year Cash Inflow After Tax

11. MERITS:
 Easy to calculate.
 Simple to understand.
 Less time.
DEMERITS:
 It stresses on capital recovery rather than
profitability.
 It does not consider the return from the
project after its payback period.

12. Average Net Income
ARR = ----------------------------------- × 100
Average Investment
Total Cash Inflows
Average Net Income = -------------------------------
No. of Years
Total Investment
Average Investment = ------------------------------
2

13. S
Present Value = -------------
(1+i)n
Net Present Value = Present Value of Cash Inflows
- Initial Cash Outlay

14. Present Value Cash Inflows
Profitability Index = --------------------------------------
Initial Cash Outlay

15. P1-C0
IRR = L + -------------
P1-P2