Capital Budgeting Techniques

The Capital Budgeting Techniques are utilized to assess the reasonability of long haul ventures. The capital planning choices are one of the basic budgetary choices that identify with the determination of speculation proposition or the strategy that will yield benefits later on over the lifetime of the task.

Since the capital planning is identified with the drawn out speculations whose profits will be gotten later on, certain customary and present day capital planning methods are utilized by the firm to pass judgment on the plausibility of these tasks.

The customary technique depends on the non-limiting rules that don't consider the time estimation of cash, while the cutting edge strategy incorporates the limiting standards where the time estimation of cash is taken into the thought.

Capital Budgeting Techniques

• Customary strategies


• The customary strategies include the accompanying assessment procedures:


• Restitution Period Method


• Normal Rate of Return or Accounting Rate of Return Method

Present day Methods

• The cutting edge strategies include the accompanying assessment procedures:


• Net Present Value Method


• Inside Rate of Return


• Changed Internal Rate of Return


• Productivity Index

The regular thing about both these techniques (Traditional and Modern) is that these depend on the money inflows and the surges of the venture.