Capital Budgeting Notes: Definitions & Explanations PDF | Download eBooks
Study Capital Budgeting lecture notes PDF with project management definitions and explanation to study “What is Capital Budgeting?”. Study capital budgeting explanation with project management terms to review project management course for online MBA programs.
Capital Budgeting Definition:
Capital budgeting can be defined as the decision-making process by which organizations evaluate projects that include the purchase of major fixed assets such as buildings, machinery, and equipment.
Project Management: A Systems Approach to Planning, Scheduling, and Controlling by Harold Kerzner?
Capital Budgeting Notes:
An organization can identify several different opportunities for a new project. The top management of the organization is responsible to see which opportunity could be exploited in favor of the organization. This means that a project must be selected based on a pre-defined selection criteria. A way of selecting a project is to compare costs and benefits associated with the project and make a trade-off between them. Benefits can be financial or non-financial. A method to analyze the financial benefits associated with the projects is called capital budgeting. Capital budgeting is a process that helps the organization to evaluate those projects that involve acquiring fixed assets in the start. Fixed assets can include building, machines, equipment etc. Using capital budgeting, it can be determined whether the investment made on purchasing the fixed assets is worthy or not.
Keep Learning with Project Management Notes
What is Escalation?
When the SWOT analysis of the organization is performed, some threats are identified. These threats can affect the organization at ...
What is Program Evaluation and Review Technique (PERT)?
Program Evaluation and Review Technique was developed in 1958 and 1959. A project involves planning and a good way to ...
What is Forecasted Cost at Completion?
As the cost performance is tracked regularly, it can be forecasted what the actual cost will be at the end ...
What is Quality Control?
In the field of quality management, it is necessary to assure the quality of the product produced or services provided. ...
What is Risk Workshop?
While analyzing risks, a special type of meeting can be conducted which is called risk workshop. In a risk workshop, ...
What is Project-Type Organization?
As the name indicates, a project type organization undertakes external projects. Each project has its own team and a project ...