Companies generally don't have unlimited money, so they must be strategic in how they spend the resources they do have. Capital budgeting is a process by which companies decide which projects or ...

Capital budgeting decisions are among the most important decisions a business owner or manager will ever make. Which assets to invest in, which products to develop, which markets to enter, whether to ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

Credit: By discounting every future $3,000 cash flow back at a rate of 10%, and subtracting the initial cash outlay of $15,000, we arrive at a net present value of $3,433.70 for this project. Under ...

The net present value (NPV) method can be a very good way to analyze the profitability of an investment in a company, or a new project within a company. But like many methods in finance, it is not the ...

When an oil company analyzes an upstream investment project in a country with high taxation levels and where debt service charges are deductible, complex problems can arise with regard to a ...

The payback method of evaluating capital expenditure projects is very popular because it's easy to calculate and understand. It has severe limitations, however, and ignores many important factors that ...