Factors Affecting Capital Budgeting

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THE FACTORS INFLUENCING CAPITAL BUDGETING DECISIONS IN THE MANUFACTURING SECTOR IN KENYA BY NCHOROKO KEVIN NYAMIAKA 636499 CHAPTER ONE 1.0 INTRODUCTION 1.1Research Background Capital budgeting is a required managerial tool. One duty of a financial manager is to choose investments with satisfactory cash flows and rates of return. Therefore, a financial manager must be able to decide whether an investment is worth undertaking and be able to choose intelligently between two or more alternatives. To do this, a sound procedure to evaluate, compare, and select projects is needed. This procedure is called capital budgeting. (Mukherjee T. and Henderson G. 1987) In the form of either debt or equity, capital is a very limited resource. There…show more content…
Furthermore, any distancing of the technical from the organizational is coming increasingly under question. Greater attention is now being given in the literature to a broader approach which considers aspects of both the external environmental setting and the internal organizational characteristics affecting decision and control processes. As yet, little of this attention has been focused on the combination of information flows, administrative processes and technical phenomena comprising the capital budgeting process; although prior research has shown that in the design of capital budgeting systems structural arrangements are necessary considerations (Berg, 1965; Ackerman, 1970; Honko,…show more content…
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