Capital budjeting & appraisal methods

CAPITAL BUDGETING & INVESTMENT APPRAISAL METHODS PRESENTATION BY PROF. V.RAMACHANDRAN SIESCOMS, NERUL, NAVI MUMBAI

AGENDA ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Concept of Capital Budgeting ,[object Object],[object Object],[object Object],[object Object]

Why Capital Budgeting ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Capital Budgeting ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Capital Budgeting ,[object Object],[object Object],[object Object],[object Object]

Capital Expenditure Budget ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Capital Expenditure Budget-objectives ,[object Object],[object Object],[object Object]

Importance of Capital Budgeting ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Kinds of Capital Investment Proposals ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Factors affecting Capital investment decisions ,[object Object],[object Object],[object Object],[object Object]

Investment Appraisal Methods ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Investment Appraisal Methods ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Pay –back period method ,[object Object],[object Object],[object Object],[object Object],Initial investment Annual cash Flow

Pay –back period method ,[object Object],[object Object],[object Object],[object Object],Annual return Initial Investment 5000 20000

Pay –back period method Rs.19000 is recovered in 3years and Rs.1000 is left out of initial investment. The cash inflow in 4 th year is Rs.4000 which indicates that pay-back period is in between 3 rd and 4 th year.i.e.3+(1000/4000) = 3.25 years Year Cash Inflows Cumulative cash inflows 1 6000 6000 2 8000 14000 3 5000 19000 4 4000 23000 5 4000 27000

Pay –back period method ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Pay –back period method ,[object Object],[object Object],[object Object],[object Object],[object Object]

Pay –back period method ,[object Object],[object Object],[object Object],[object Object]

Discounted Cash Flow (DCF) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

NPV Method ,[object Object],[object Object],[object Object]

NPV Method ,[object Object],[object Object],[object Object],[object Object]

Excess present value index ,[object Object],[object Object],[object Object]

Internal rate of return (IRR) ,[object Object],[object Object],[object Object],[object Object],Cash inflows Cash outflows

Internal rate of return (IRR) ,[object Object],[object Object],[object Object],[object Object],[object Object]

Accounting Rate of return (ARR) ,[object Object],[object Object],[object Object],[object Object],[object Object]

CAPITAL BUDGETING & INVESTMENT APPRAISAL METHODS Thank you

Capital budjeting & appraisal methods

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Capital budjeting & appraisal methods