Topic : Capital Budgeting Technique

Contributor: Zulfiqar Hasan, Associate Professor (Finance)

The word Capital refers to be the total investment of a company of firm in money, tangible and intangible assets.

Capital budgeting is the process of identifying, evaluating, and implementing a firm’s investment opportunities.

Capital budgeting consists of various techniques used by managers such as:

1. Payback Period.
2. Discounted Payback Period.
3. Net Present Value.
4. Accounting Rate of Return.
5. Internal Rate of Return.
6. Profitability Index
7. Modified Internal Rate of Return (MIRR)
8. Equivalent Annual Annuity (EAA)
   

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