Capital budgeting is a vital process that helps businesses make informed investment decisions by evaluating long-term projects and determining profitability. It addresses key strategic questions, such as which products to offer, markets to enter, and assets to acquire, guiding firms in allocating limited capital wisely. Often called strategic asset allocation, it focuses on investing in fixed assets that define a business's operations.
This process is crucial when resources are limited, ensuring investments contribute to the most growth and competitive advantage. Businesses can prioritize projects that align with their long-term goals by analyzing projected cash flows.
For example, a toy manufacturer like Funblast might need to decide between upgrading its factory or expanding sales internationally. Capital budgeting techniques help assess each option's costs, risks, and potential returns.
Ultimately, capital budgeting is important because it can guide strategic decisions, ensuring that companies invest in assets that will not only drive current operations but also secure long-term profitability and shareholder value.
Du chapitre 7:
Now Playing
Capital Budgeting
95 Vues
Capital Budgeting
237 Vues
Capital Budgeting
128 Vues
Capital Budgeting
277 Vues
Capital Budgeting
142 Vues
Capital Budgeting
85 Vues
Capital Budgeting
49 Vues
Capital Budgeting
69 Vues
Capital Budgeting
251 Vues
Capital Budgeting
137 Vues
Capital Budgeting
54 Vues
Capital Budgeting
144 Vues
Capital Budgeting
39 Vues
Capital Budgeting
46 Vues
Capital Budgeting
47 Vues
See More