International Research Journal of Education and Technology

This chapter presents introduction of the capital budgeting decision. This chapter has been divided into four sections. Section I discusses the different types of investment projects and different stages of capital budgeting process. Section II discusses the capital budgeting techniques available for investment evaluation and other issues like discount rate used, cash flow estimation, NPV-IRR conflict etc. Section III presents a discussion on the aspect of risk, various risk factors and capital budgeting techniques for incorporating risk. The last section i.e. Section IV deals with the methods used to calculate cost of capital and cost of equity capital.

KEYWORDS: Budget, Capital, Discounted,Payback,securities etc