A capital expenditure proposal is a formal request to undertake projects to acquire or upgrade physical assets. The proposed projects will be ranked according to criteria like payback period, discounted payback method, net present value, and internal rate of return. There are different types of investment proposals such as mutually exclusive, contingent, and independent proposals as well as replacements. Key principles for capital expenditure proposals include carefully estimating costs, finding profitable opportunities, estimating future revenues and expenses, considering non-monetary factors, screening and selecting projects, and preparing necessary reports.

1. BASIC PRINCIPLES OF
CAPITAL
EXPENDITURE
PROPOSALS
ASNAD P A
II SEM MBA

2. CAPITAL EXPENDITURE
PROPOSALS
• Capital Expenditure Proposal is a formal request
to undertake capital expenditures.
• Capital Expenditure is the money spent to
acquire or upgrade physical assets such as
buildings and machinery.

3. CAPITAL EXPENDITURE
PROPOSALS
The proposed projects will be ranked
according to a criteria.
• Methods used for ranking are:
 Payback period
 Discounted payback method
 Net present value method
 Internal rate of return

4. INVESTMENT PROPOSALS
• Mutually Exclusive Investment Proposals
• Contingent Investment Proposals
• Independent Investment Proposals
• Replacement

5. PRINCIPLES OF CAPITAL
EXPENDITURE PROPOSALS
• Careful Estimate of amount to be invested
• Creative search for profitable opportunities
• Estimation of future revenue & expenditure
• Considering Non-Monetary factors influencing
decisions
• Screening & Selection
• Forms & Procedures: Preparation of reports
necessary for capital expenditure program

6. THANK YOU