## Profitability Index

Profitability Index Profitability index (PI) is the ratio of investment to pay off a suggested project. It is a useful capital budgeting technique for grading projects because it measures the…

## Present Value of Multiple Cash Flows

Present Value of Multiple Cash Flows We come across many cases where we have to determine the present value of series of multiple cash flows. There are two ways we…

## Discounted Payback Period

Discounted Payback Period One of the limitations in using payback period is that it does not take into account the time value of money. Thus, future cash inflows are not…

## Internal Rate of Return

Internal Rate of Return Internal Rate of Return is another important technique used in Capital Budgeting Analysis to access the viability of an investment proposal. This is considered to be…

## Payback Period

Payback Period Payback period is the first formal and basic capital budgeting technique used to assess the viability of the project. It is defined as the time period required for the…

## Capital Budgeting Process

Capital Budgeting Process Capital Budgeting Process is a process of identifying and evaluating projects where businesses are expected to receive cash flows over a period longer than one year. Any…

## How To Use Financial Calculator?

How To Use Financial Calculator? The financial calculator is considered as easiest and less time-consuming tool for computation of basic as well as advanced financial analysis techniques. A financial calculator is…

## Net Present Value (NPV) Formula and Example

How to Calculate Net Present Value using Excel? The calculation of net present value is used when a business has to identify a viable investment opportunity. There are many ways to…

## Net Present Value

Net Present Value Net Present Value measures the difference between present value of future cash inflows generated by a project and cash outflows during a specific period of time. With…

## Importance of Capital Budgeting Decisions

Importance of Capital Budgeting Decisions Capital budgeting is a process used to determine whether a firm's proposed investments or projects are worth undertaking or not. The process of allocating budget…

## Capital Budgeting in Financial Management

What is Capital Budgeting? Capital budgeting is the process which enables the management to decide which, when and where to make long-term investments. Businesses always look for opportunities that increase shareholder…