For an entrepreneur, choosing what to invest in should not be an exercise of instinct. With capital budgeting methods, various projects can be appraised simultaneously, with the end result indicating which one will have the highest impact on entity’s value. The funds available to be invested in a business either as equity or debt, also known as capital, are a limited resource. Thus, entrepreneurs must make careful choices about when and where to invest capital to ensure that it is used wisely to create value for the entity.
Capital budgeting is the comparison of the cost or investment in a project versus the cash flows generated by the same venture. If the value of the future cash flows exceeds the cost or investment, then there is potential for value creation and the project should be investigated further with an eye toward extracting this value.
How can we help:
We will perform capital budgeting analysis for your project. With expert’s professional skill, knowledge and experience across various industries appropriate estimates of interest rates, growth, projections of cash flows will be used during our analysis. We provide you with available options with substantiating data to make informed decisions.