Overview of capital budgeting tools for manufacturing firms. Details NPV, IRR, risk analysis, and after-tax cash flow modeling for strategic asset acquisition and lease vs. buy ...

Reviewed by Margaret James Fact checked by Yarilet Perez What Is Capital Budgeting? Capital budgeting is the process of choosing projects that add to a company's value. The capital budgeting process ...

Capital budgeting encompasses the methods and techniques used by firms to evaluate long‐term investment projects and allocate resources effectively. Traditionally, discounted cash flow (DCF) ...

When evaluating potential capital investments by your small business in various projects, the Internal Rate of Return, or IRR, can be a valuable tool in assessing the projects most worth pursuing. IRR ...

Determine the net present value (NPV), internal rate of return (IRR), and payback periods (PBP) of a series of cash flows using spreadsheet analysis Apply NPV, IRR, and PBP criteria to evaluate an ...

Capital budgeting is the evaluation and selection of long-term investments on the basis of their costs and potential returns. The process provides a framework for formulating and implementing the ...

Capital expense (CapEx) budgeting is frequently misunderstood and disregarded by many organizations. A capital expense, at its core, refers to a significant, long-term investment undertaken by a ...

Calculating the internal rate of return, or IRR, of an investment is a powerful tool for businesses. When a manager is faced with a capital intensive decision, IRR can quickly compare the financial ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

NPV calculates profitability by considering all cash flows and the time value of money. A positive NPV indicates a potentially profitable investment opportunity. NPV's effectiveness relies on accurate ...