
Concept Introduction:
Capital budgeting is a technique to plan long term investment of funds in long term activities whose benefit released for several years.
Example: - Purchase of machineries, purchase of building for business purpose, setting of factories etc.
Profitability index: - Profitability index or Present value index is the ratio between Present Value of Inflow and Initial
To Calculate:-
Present Value Index.
Concept Introduction:
Capital budgeting is a technique to plan long term investment of funds in long term activities whose benefit released for several years.
Example: - Purchase of machineries, purchase of building for business purpose, setting of factories etc.
Net Present value refers to the difference between the present value of inflows and the present value of outflows associated with the projects.
Profitability index: - Profitability index or Present value index is the ratio between Present Value of Inflow and Initial Cash Outflow associated with Project.
To Recommend
Which Project should be selected for Management.

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Chapter 15 Solutions
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