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avy, , ( ISION a a, VESTMENT DEC ferred to the activity of deciding the ;, is_refe s long term investment, in omen ’, , ision |! Ia, Investment deci term as We 0, h_ short term investment decision jc "Wo, , toons nts Abou, te, , a, , rs bot, , investment. It cove t asse, , fixed assets and the curren ent projects whose benefits accrue in the long ry, stm f funds as among cash ang reed, , iv, , allocation of capital to inve + allocation ©, i ent decision 'S abou pare vie eC ca, term investm : ane, , invested in asse reseee, , . he funds inves er : Ctum ,, , and inventory etc. T Hence it is a risky decision where finance manager has tone, , the business concern. of investment. As the future is y a, , imum care in selecting the areas Mcertain 9,, maxi, , ted must cover both risk as well as the uncertainities, The Selectig,, returns oe evaluated by using certain techniques like costing technique, s, PER es analysis etc., before making final decision on the investment Venues, uage ’ , >, The factors considered while making capital investment decisions are:, (i) Large, , of funds. But the funds available with th, , excess is necessary to purchase the resources., , (ii) Long term commitment of funds: Capital investment involves not only the large, amount of funds but also funds for long term or more or less on permanent basis,, , Investments: Capital budgeting decisions generally involve large invest,, e firm are always limited and the demang te, , (iii) Reversible nature: The capital investment decisions are of reversible nature. One, the decisions are taken, these decisions can be changed according to the marke, situations., , (iv) Long term effect on profitability: Capital investment decisions have a long tem, and significant effect on the profitability of a concern. Not only the present earnings, of the firm are affected by the investment in capital assets but also the futur, growth and profitability of the firm depends upon the investment decision take!, today., , CAPITAL BUDGETING, , Capital budgeting is the planning process used to determine whether, organization’s long term investments such as new machinery, replacement machine’, ties plants, new products, and research and development projects are worth pursul, t is a budget for Major capital investment, expenditures,, , Meaning of Capital Budgeting, , Capital budgeting refers to the, investment in fixed assets s, , term plan to make and fina, , uch Process of making decision regarding a, ae as machinery, land, buildings, furniture ete. It Is @, © proposed capital Outlay,