Relation between Popular Methods of Capital Budgeting Decision Technique of Commercial Enterprise a Mathematical Approach with Simulated Projects

Main Article Content

Sanjay Tripathi

Abstract

In Financial Management the concept of Time Value of Money play an important role which include the concepts of discounted value and future value. This study presents the technique within the Time value of money of capital budgeting.  The objective of this work is to obtain a combined relationship between the capital budgeting decision technique such as Net Present Value, Internal Rate of Return, Modified Internal Rate of Return, Profitability Index, Modified Profitability index and cost of capital. The effectiveness of these relationships is discussed and finally we have considered an example to verify the correctness of our relationship by considering a stimulated project. The Modified Internal Rate of Return obtain by other authors [1-4] is same as calculated with the relationship we obtained.

Keywords:
Net Present Value, Internal Rate of Return, profitability index, modified internal rate of return, modified profitability index, project evaluation and Capital Investment Decisions

Article Details

How to Cite
Tripathi, S. (2021). Relation between Popular Methods of Capital Budgeting Decision Technique of Commercial Enterprise a Mathematical Approach with Simulated Projects. Asian Journal of Economics, Finance and Management, 5(4), 9-15. Retrieved from https://globalpresshub.com/index.php/AJEFM/article/view/1282
Section
Original Research Article

References

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