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  • Capital Budgeting: Dept. of Hospital Administration

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    mallesh
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    Capital budgeting refers to the process of making investment decisions about fixed assets or capital projects that have long-term impacts and require large initial cash outlays. There are various types of capital budgeting decisions an organization must make, such as whether to replace or expand existing assets, based on factors like costs, risks, and potential returns. Common techniques used to evaluate capital projects include payback period, accounting rate of return, discounted payback, net present value, and internal rate of return.

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    capital budget

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    Capitalbudgeting 27-01-2017

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    Capital budgeting refers to the process of making investment decisions about fixed assets or capital projects that have long-term impacts and require large initial cash outlays. There are various types of capital budgeting decisions an organization must make, such as whether to replace or expand existing assets, based on factors like costs, risks, and potential returns. Common techniques used to evaluate capital projects include payback period, accounting rate of return, discounted payback, net present value, and internal rate of return.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    6 views9 pages

    Capital Budgeting: Dept. of Hospital Administration

    Uploaded by

    mallesh
    Capital budgeting refers to the process of making investment decisions about fixed assets or capital projects that have long-term impacts and require large initial cash outlays. There are various types of capital budgeting decisions an organization must make, such as whether to replace or expand existing assets, based on factors like costs, risks, and potential returns. Common techniques used to evaluate capital projects include payback period, accounting rate of return, discounted payback, net present value, and internal rate of return.

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    of 9

    CAPITAL

    BUDGETING
    DEPT. OF HOSPITAL
    ADMINISTRATION
    CAPITAL
    BUDGETING
    WHAT
    WHY? HOW?
    ?

    Techniques/
    Meaning Importance
    Methods
    What is
    capital
    budgeting
    ?
    Decision making with
    regard to investment in
    fixed assets (long term
    investments and
    capital projects)
    FACTORS TO BE CONSIDERED

    Huge investment cost


    Time
    Risk
    Irreversibility
    Complexity
    Surplus
    TYPES OF CAPITAL BUDGETING
    DECISIONS

    ON THE BASIS OF FIRMS


    EXISTANCE

    ON THE BASIS OF NATURE OF


    DECISION
    CAPITAL BUDGETING
    DECISIONS BASED ON FIRMS
    EXISTANCE
    REPLACEMENT REVENUE EXPANSION
    DECISIONS DECISIONS

    To replace the existing on with new and improved Expansion decisions


    Modernization decisions Diversification decisions
    CAPITAL BUDGETING
    DECISIONS BASED ON
    NATURE
    Mutually ExclusiveOF DECISION
    Decisions
    Accept Reject Decisions
    Contingent Decisions
    CAPITAL BUDGETING
    TECHNIQUES
    TRADITIO Simple Payback Period
    NAL ARR(Accounting Rate of Return)
    METHODS Payback Reciprocal

    DISCOUNT Discounted Payback period


    ING NPV
    TECHNIQU PI
    ES IRR
    THANQ

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