Study On Capital Budgeting Techniques In Large Scale Industries

• Author(s):

  Sridharshana.S.U | Dr. M. D. Chinnu, Assistant Professor

• Keywords:

  Capital Budgeting, Net Present Value, Internal Rate Of Return, Payback Period, Discounted Cash Flow, Investment Risk, Strategic Finance

• Abstract:

  Capital Budgeting Stands As A Crucial Element Within Financial Decision-making, Especially For Large-scale Industries, As It Empowers Firms To Undertake Strategic Investment Choices Aligned With Their Long-term Corporate Objectives. This Research Explores The Real-world Application Of Various Capital Budgeting Techniques, Such As Net Present Value (NPV), Internal Rate Of Return (IRR), Payback Period, Discounted Payback Period, Profitability Index, And Modified Internal Rate Of Return (MIRR). The Effectiveness Of These Methods In Aiding Industries To Evaluate Investment Opportunities And Assess Associated Risks Is Closely Examined. Although Many Corporations Implement Advanced Discounted Cash Flow (DCF) Models, Practical Business Conditions Often Necessitate A Combination Of Both Traditional And Modern Methods. Elements Like Organizational Size, Industry Sector, Capital Framework, And Leadership Approach Significantly Influence The Choice Of Evaluation Techniques. Additionally, Contemporary Risk Assessment Tools, Including Real Options Analysis And Scenario Planning, Are Becoming More Common In Investment Decision-making Processes. Simpler Approaches, Such As The Payback Period Method, Continue To Hold Favor In Certain Sectors Due To Their Simplicity And Quick Results, Despite Known Limitations. This Paper Sheds Light On The Evolving Trends In Budgeting Strategies Across Various Industries And Regions, Underlining The Importance Of Matching Financial Decision-making Tools With Objectives For Sustainable Growth And Adaptability In A Constantly Changing Business Landscape.

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Other Details

• Paper id:

  IJSARTV11I5103444

• Published in:

  Volume: 11 Issue: 5 May 2025

• Publication Date:

  2025-05-03

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