Crossover Rate – Meaning, Formula, Example, and More
Crossover Rate is a crucial tool in capital budgeting. It primarily allows management to analyze the two mutually exclusive projects together and then decide… Read Article
Capital Rationing
Value Additivity: Meaning, Uses of the Principle, Limitations and More
Value Additivity: MeaningThe Value Additivity Principle is a financial principle that says that the total value of a group of assets is equal to… Read Article
Importance of Capital Budgeting
Capital Budgeting MeaningCapital budgeting is a process that helps in planning the investment projects of an organization in the long run. It takes all… Read Article
How can a Capital Budgeting Decision Go Wrong?
What is a Capital Budgeting Decision?Capital budgeting decision is the process by which companies make decisions pertaining to fund allocation for huge investment decisions.… Read Article
Capital Budgeting – Advantages and Disadvantages
Capital budgeting revolves around capital expenditures, including large inflow and outflow of money to finance investment projects. It is a process by which a… Read Article
Process of Capital Budgeting
Capital budgeting is perhaps the most important decision for a financial manager. Since it involves buying expensive assets for long-term use, capital budgeting decisions… Read Article
Capital Rationing – Its Assumptions, Advantages and Disadvantages
Capital rationing is a common practice in most companies as they have more profitable projects available for investment than the capital available. In theory,… Read Article
Types of Capital Rationing – Hard and Soft
Capital rationing is the strategy of picking up the most profitable projects to invest the available funds. Hard capital rationing and soft capital rationing… Read Article
Capital Rationing
What is Capital Rationing?Capital rationing is a technique of selecting the projects that maximize the firm’s value when the capital infusion is restricted. The… Read Article
Capital Budgeting
What is Capital Budgeting?The term Capital Budgeting is a combination of two words ‘capital’ and ‘budgeting.’ The capital here refers to big expenditures that… Read Article