Know All About Capital Budgeting and Enhance Your Hold on the Subject

Get Quick and Accurate Online Homework Help from Qualified Tutors.

trustpilot ratings

4.2 out of 5

My Homework Help

4.7 out of 5

sitejabber ratings

4.8 out of 5

  • NHonest Pricing
  • NBetter Grades
  • NMoney-back Guarantee

Get Homework Help From ExpertsFREE QUOTE

Please enter the details of your homework.
Get a response in under 15 min
Rate this post

The term Capital Budgeting is defined as an investment appraisal technique. Very frequently, it is used to evaluate the pros and cons of a particular project of investment. It has a set of criteria associated with itself. Depending on the fulfillment of those criteria, a given investment project is said to be financially feasible or financially infeasible.

Importance of capital budgeting decisions

Capital budget comprise capital receipts and payments. Capital receipts include the loans that are raised by the government from the public. Capital payments include the expenses towards asset acquisition. These assets can be machinery, equipment, buildings or land.

Capital budgeting decisions are the decisions that are taken for allocation of a confined capital to different projects. These decisions are governed by expansion and acquisition of new assets. A business’s growth, profitability and risk is associated with capital budgeting decisions.

The following points list the importance of capital budgeting decisions.

  • Long term effect

Investment in long term capital assets yield returns in future. Thus, they include the future prospects of a company.

  • Excess of funds

Fixed capital investment demands excess of funds. This makes the capital budgeting decisions, even more crucial as large amounts of funds remain blocked for a very long time period.

  • High risk involvement

When the monetary investment is higher, the risk factor is also higher. It is therefore, that these decisions are said to be risky and have a long term impact on the existence of the company.

  • Irrevocable decisions

The capital budget decisions once made cannot be undone, because that will again involve a huge capital. The loss that is usually incurred in these processes is also very high.

Factors demanding long term capital investment:

  • Expected rate of return

This indeed is the most crucial factor that affects decisions of investment in any project. Projects whose return rates are higher are preferred over those that offer a less rate of return.

  • Criteria of investment

There are several criteria that determine the decision of investment in any project. These criteria may range from availability of raw materials, to access to technology. The pros and cons of investments and suggested alternatives are weighed properly on various grounds. On the basis of that the investment decisions are taken.

Some techniques involved in capital budgeting:

  • Net present value (NPV)

The Capital Budgeting projects are either independent projects or mutually exclusive projects. A project is said to be independent, if acceptance or rejection of other projects does not make any change to it.

Mutually exclusive projects on the other hand, involve a big umbrella which shelters a set of projects. From that set, at max only one will be accepted. Only the net present value decision rule lead to the correct decision of choice in case of the mutually exclusive projects. The assumption that the net present value takes into consideration is that a project’s cash flow can be reinvested at the cost of capital of a firm.

  • Internal rate of return (IRR)

It can be explained as the discount rate that gives a zero net present value. It is a often used as a common measure for investment efficiency. The result that IRR method provides is the same decision as that obtained by the NPV method in an environment having no constraint. Normally, a negative cash flow occurs at the start of the project. Cases where zero NPV discount rate exists have no unique IRR.

  • Payback period

This is the time period that is required to recover the expended funds in an investment. In simple words, payback period measures the time that is required by someone to ‘pay for himself or herself’. Shorter payback points are preferable over longer ones. Though there are certain limitations to it, yet its ease at usability makes it a choice.

  • Profitability index

It is also known as profit investment ratio. It is the ratio of payoff to investment in a project. The quantification of values created per unit of investment makes this tool a very useful for ranking projects. A profitability index of 1 means breakeven. A value less than one signify that the present value of the project is less than the initial investment. As the value increases, the financial attractiveness of the project also increases.

Difference between capital budgeting decision, financing decision and revenue budget decisions

The financing decisions are the decisions that are related to identification of various sources of funds that involve debt and equity. These decisions are achieved by a fair amount of risk and profit consideration.

The revenue budget decision refers to a budget that depicts the revenue receipts and Government revenue expenditures. It is generally a short-term one

Capital budgeting on the other hand includes decisions that are around the allocation of fixed capital to different projects. It is a long term decision and in most of the cases cannot be altered.

You May Also Like

Benefits of Online Homework Help

subjects covered

70+ Subjects

Our team of professional academic writers are experts in their fields and are well-equipped to handle any complex subject. You can always count on one of our specialists to assist you.
short deadline

Short Deadlines

We understand the importance of meeting deadlines and we pride ourselves on being able to deliver tasks quickly. No matter how tight the deadline, we will complete your homework on time.
chat with expert

Chat with Expert

Stay in touch with your expert by utilizing our secure chatboard for all your queries and concerns. You can easily check progress and make sure your work is on the right track.
free revisions

Free Revisions

We strive to ensure complete customer satisfaction. We offer free revisions to make sure our clients are happy with the final product. Your satisfaction is our top priority.

Reviews from Customers

Rated 4.5 out of 5
4.5 out of 5 stars (based on 457 reviews)
Very good35%

Frequently Asked Questions


How do I submit my assignment?

Getting assignment help is very simple with us. Students can either send us the homework via email or they can upload it to our online form here. For a quicker response, You can also chat with us at WhatsApp and submit homework directly. You are sure to get a response from our side within 10 minutes. You can pay for your order using secure PayPal or major credit card gateways.


Who will do my homework?

All our tutor experts are highly qualified professionals – holding at least Master’s degree in their fields. Currently, our tutor pool is made of 400 subject-specific experts.

Each expert has been individually chosen after a series of rigorous screen tests, which involves credential checks, work history analysis, writing sample assessment, and one-on-one interviews.


How much will my homework cost?

Each assignment is quoted a unique price. It is based on (i) complexity of task, (ii) your deadline and (iii) tutor’s estimate of the time it will take them to complete your homework. There are no obligations, and you are free to discuss the price quote with the tutor.

We also accept partial payment to start working on your assignment help. You can pay the remaining amount when your task gets completed. No pressure of up-front payment. No hidden order costs. We do not have a monthly fees or minimum payments for services.


Can I pay someone to help me with my homework?

Yes, you can pay online tutors for homework help. There is nothing wrong with asking for help from trained and professional subject tutors to clarify doubts regarding any assignment or coursework.


What mode of payment is acceptable?

There are several ways to pay for homework help:

  • Credit/Debit Card: You can use your credit or debit card to make a payment online. We accept VISA/MASTERCARD/AMEX.
  • PayPal is a secure online payment service that allows you to pay for essay writing services using your account balance or linked bank account.


Can I chat with my tutor?

Using our secure chat board, you can now chat directly with your assigned tutor. The chats are encrypted both ways to secure your privacy. This makes your contact with the tutor directly & confidentially, so you can better explain any requirements or changes if needed or just need updates.

You can't contact the experts outside of chat board platform. Sharing any personal information, including but not limited to contact information, goes against our Terms and Conditions and therefore may result in permanently blocking you from the platform. We take any personal data very seriously and we do it for the safety of our users.

Know more about chat board here.


Can I get free online homework help?

Our homework services are not free because we provide customized, high-quality homework solutions. We have a prepaid system that ensures professional homework helpers are paid fairly for their work and time. We believe that the value of their expertise and the effort they put into crafting each assignment justifies the cost of our service.

Is My Homework Help Legit?

My Homework help is absolutely legit! We are the leading providers of college homework services since 2012. We connect you with experienced tutors for your assignment and make sure you get completed answers before deadline. Our guarantee is high-quality assignment solutions or your money-back. It’s that risk-free! Furthermore, everything about you is kept confidential.


Can I trust you?

My Homework Help is absolutely reliable. Students of the world's top universities use our services and 50% of our customers are repeat customers. Our ordering process is very simple & transparent. There are no hidden fees or subscription anything like that. You can also request a refund if you think that our expert wasn’t able to meet your requirements. Your prime satisfaction is our end goal!

Know more - How it works


What about privacy & confidentiality?

Using My Homework Help is absolutely safe. We care about your security, therefore we encrypt all personal data to make every user feel safe while using our services and we don’t share any personal information with any third parties without your permission. Your credit card information is not stored anywhere at My Homework Help, and use of PayPal relies on their secure payment networks. Your identity, payment and homework are in safe hands. You can always be certain of getting professional help and remaining anonymous, while using My Homework Help.