Discuss two pros and two cons cons of a business applying different capital budgeting 3 page paper

Jun 21st, 2015
Studypool Tutor
Price: $10 USD

Tutor description

Discuss two pros and two cons cons of a business applying different capital budgeting techniques when it is faced with making wealth-maximizing decisions around investing corporate funds.Provide one example that illustrates the potential consequences of a business deciding to apply a single technique to all corporate investment decisions.Identify the most efficient capital structures for both a manufacturing company and a software development firm. Provide a rationale for your response.

Word Count: 570
Showing Page: 1/3
1- Companies employ different capital budgeting techniques to distribute resources for short-term and long-term business plans. For instance, if a company would like to acquire another business it will evaluate whether its decision is worth keeping or not. This company will evaluate the investments under different capital budgeting methods, the payback method and internal rate of return method. The payback method needed less input and used for speedy evaluation of small investments, and it is normally easier to calculate compared to other budgeting capital budgeting methods. But it ignores the time value of money which misrepresents the true value of each cash flow. It only considers those cash flows that you recover up until your initial investment and fail to comprise those you might collect in succeeding years. This drawback might cause you to forward an investment that produces s

Review from student

Studypool Student
" Thank you, Thank you, for top quality work, this is your guy!! "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1822 tutors are online

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors