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Critically appraise the application of traditional capital budgeting techniques. - Assignment Example

Finance & Accounting
Pages 18 (4518 words)
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Critically appraise the application of traditional capital budgeting techniques Table of Content Abstract 1. Introduction 2. Capital Budgeting and Post Completion Auditing 2.1 Objectives of capital budgeting 2.2 Developments in the Application of the Techniques 2.2.1 The Role of Post-completion Auditing 2.3 Analysis of Research methodologies 2.4 Findings 2.5 Knowledge and Use of Academic Literature 2.6 Critical Review 3…

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Critically appraise the application of traditional capital budgeting techniques.

At the same time, many business organizations failed to survive stiff market competition and subsequently went out of the market. The last decade witnessed a series of corporate scandals and bank failures due to poor managerial accountability and ineffective corporate governance practices. Hence, today’s managements give particular focus to corporate governance principles and long term business decisions. In this context, the concept of capital budgeting is of considerable significance because it evaluates future cash inflows and outflows on a prospective business project and thereby determines it potentiality. After the global financial crisis 2008-09, capital budgeting is specifically considered to be an integral part of the financial management. This paper clearly describes how the capital budgeting technique can contribute to the long term sustainability of business organizations. In addition, the influence of capital budgeting on managerial efficiency and organizational performance is also explained in this paper. Some recent developments in the application of capital budgeting have increased this method’s relevance in the modern business context. ...
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