Capital Market Question:
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What are the techniques available for evaluation of capital expenditure proposals?
Answer:
The techniques which are available for the evaluation of capital expenditure proposal depend on the management which has to select and have the profitable proposal out of different proposal under study. The technique which is used are as follows:-
1) Degree of urgency method
2) Pay back method
3) Rate of return method which is not adjusted properly
4) Present value method which is adjusted through time and it also includes net present value method.
1) Degree of urgency method
2) Pay back method
3) Rate of return method which is not adjusted properly
4) Present value method which is adjusted through time and it also includes net present value method.
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