Financial Planning and Analysis

Capital Budgeting

Capital Budgeting is a vital financial management tool used by companies to evaluate and select long-term investment projects. This subject teaches students how to assess the profitability and strategic suitability of potential investments using techniques such as Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period. It involves forecasting future cash flows, estimating capital costs, and analyzing financial risks associated with large projects like new product lines, facility expansions, or acquisitions. By studying capital budgeting, students gain insights into making sound investment decisions that align with a company's strategic objectives and maximize shareholder value.