Title: Explain capital budgeting, and list each of the five steps of the capital budgeting decision process ... Post by: StormLrd on Nov 8, 2017 Explain capital budgeting, and list each of the five steps of the capital budgeting decision process model. Include both phases for step five.
Title: Re: Explain capital budgeting, and list each of the five steps of the capital budgeting decision ... Post by: Munihasen on Nov 8, 2017 Capital budgeting is long-run planning for investment projects that usually have a life that is greater than one year.
Step 1 Identify potential capital investments that agree with the organization's strategy. Step 2 Gather information from all parts of the value chain to evaluate alternative projects . Step 3 Forecast all potential cash flows attributable to the alternative projects. Step 4 Determine which investment yields the greatest benefit and the least cost to the organization. Step 5 Phase 1: Obtain funding and make the investments selected in step 4. Phase 2: Track realized cash flows, compare against estimated numbers, and revise plans if necessary. |