Investing

Capital investment process

The capital investment process requires a series of actions and decisions by management. These are likely to include: 1. Determination of the budget 2. Identification of possible projects 3. Preliminary screening 4. Project evaluation 5. Authorization of projects 6. Management and monitoring 7. Post completion audit Determination of the Budget It is known that capital Read More…

Investing

Success Factors for post-completion audit in capital budgeting

Companies which have spent resources on the installation and implementation or post-completion audit procedures obviously want to be assured that the system is cost-beneficial. One can establish a range of factors which are central to achieving the desired objectives and benefits of post-completion audit. They are as follows: • The support of top management for Read More…

Investing

Project evaluation cash flows and their timing

In project evaluation, the sign conventions which apply are cash outflows or expenditure being represented by negative figures, and cash inflows or income being represented by positive figures. The timing of cash flows is very important in investment appraisal; for convenience an annual time scale is normally used where: • Year 0: represents the date Read More…