Investment Decisions

1. INVESTMENT DECISIONS
FACTORS INFLUENCING CAPITAL BUDGETING DECIONS AND OBJECTIVES OF
CAPITAL BUDGETING

2. FACTORS INFLUENCING CAPITAL
BUDGETING DECISIONS
 Capital Structure
 Working Capital
 Capital Return
 Availability of Funds
 Earnings
 Lending Policies of Financial
Institutions
 Management Decisions
 Project Needs
 Government Policy
 Taxation Policy
 Project’s Economic Value

3. Objectives of Capital Budgeting
 Control of Capital Expenditure
 Selection of Profitable Projects
 Identifying the Right Source of Funds

4. Capital Budgeting process
 Identification of Investment Proposals
 Screening the Proposals
 Evaluation of various proposals
 Fixing Priorities
 Final Approval and Preparation of Capital Expenditure Budget
 Implementing Proposal
 Performance Review