Capital Budgeting

Project ReportOn

Debonair BD Collections

Project Report1

On

Debonair BD Collections

Prepared for Rozario, Marvin

Course Instructor, Capital BudgetingSection: C

Prepared by

Afnan, Tasmia

ID: 09-13533-1

Ahmed, Tahsin ID: 09-13277-1

July 15, 2012

2

LETTER OF TRANSMITTAL

July 15, 2012

Rozario, MarvinCourse Instructor, Capital BudgetingAmerican International University – Bangladesh

Subject: Submission of the Project report on “Debonair BD Collections”.

Dear Sir,

It is indeed a great pleasure to have the opportunity to submit the business report. We have prepared this business report on “Debonair BD Collections”. It is a partial requirement for your course Capital Budgeting.

We would like to mention that we highly appreciate your suggestion for preparing this business report; while working on this report, we got the opportunity to learn a lot about the business process that how we have to calculate the capital budgeting tools (NPV, IRR, PBP, DPBP and PI) for a business to make the perfect decision that, should we except the business project or not.

So, we hope that your honor will be kind enough to accept this report and bless us.

Sincerely yours,

Afnan, Tasmia ID: 09-13533-1Ahmed, Tahsin ID: 09-13277-1

3

Acknowledgement

By the grace of Almighty Allah, we would like to say that the submission of the Business project report titled as “Debonair of BD collections” has gifted us with many delightful moments.

Completion of this report has made us grateful to a number of people. First of all, we would like to thank our course instructor Rozario, Marvin for giving us this wonderful opportunity to do this report. By this report, he intends to get us experienced on to analyze a business. Throughout the Capital Budgeting course, till now, he has helped and supported us in every way possible and it is because of such devotion and cooperation that this report has turned into a great success. It is our honest confession that without his valuable guidance and suggestion, it would never have been possible to complete this project successfully.

Moreover, we also like to thank our relatives and friends who helped us by giving their valuable opinion to make our project successful.

4

Table of Content

Contents Page Number

Introduction 5

The Opportunity 6The Logo of the Debonair BD Collections

8

Debonair BD Collections’ Mission Statement 8Vision of the organization

9

External forces shaping the industry 11-12Business Model (Company profile)

13

Advertisement and Promotion 14-15

Products 16

Pricing strategy 17

Financial Projection 18

Capital Budgeting Techniques 25-27Scenario and Sensitivity Analysis

28Findings and Recommendations

28Conclusion

29

5

Table of Charts

Contents Page Number

Overall Industry information 10Some strategic indicators 10Start-up cost 19Other Start-up cost 19Machinery, land & other Costs of the company (Yearly)

20

Salary Expenses (Yearly) 20

Revenue (Sales Forecast) of the company

21

Cost of Goods Sold 22

Incremental Cash Flow of the Company 23

Beta Calculation for the Company 24

Calculating Capital Budgeting Tools 24

6

Introduction

Debonair BD Collections- is a fashion house selling exclusive ladies

wear. We sell Exclusive saree and Kameez, Regular Saree and kameez,

Bridal wear for formal parties, weddings, celebrations (Eid etc). We

have Seasonal collection for summer, winter and autumn. We are

located in Gulshan-2 and we serve the women from Ultra high, Lower

high and higher middle class families. We are two partners initially

investing in our business, both contributing equal amount and sharing

equal profit. Our management team also includes us. We have

conducted thorough market research before we decided to invest in

our current business plan consists the interview of the executives of

our competitors, questionnaire survey, and secondary research and so

on. We have collected detailed data and conducted in –depth analysis

about our market, industry and competition. These data and analysis

has given us the impression about the over all feasibility, profitability,

risk etc about the business. We have decided to sell Indian cloths like

our major competitor Vasavi, Shopper’s world etc. But we will sell

indian product at a lower price than our competitor and make up that

from selling Pakistani product at a higher price which is not being

offered by any of our major competitor. We have a major marketing

campaign to establish our business. We have multi dimensional market

penetration strategy by using billboards, Television promotional

program, Magazine advertisement, leaflet and after sales offers. We

have a substantial initial investment which we will finance from

multiple sources. As per our moderate projections our business is a

profitable one with enough opportunity for future growth, expansion

and diversification.

7

The Opportunity:

It’s an era of globalization and people are becoming closer day by day.

There taste and preferences are becoming similar. This trend has also

gripped the clothing sector of the whole world. In Bangladesh also

people are becoming more and more concern about their outfits and

there is a significant increase in spending on the apparel sector. But if

we compare between the male and female sector it can be found that

female segment has been more profit generating for this apparel

sector. When we did our research we found that though there are lots

of fashion houses but there is still a significant gap between the

customer’s expectations and the offers of different existing fashion

houses. So we came up with the idea to establish “Debonair BD

Collections” as a Fashion House in order serve the female segment not

only with the good quality of product but also at a reasonable price.

After thorough market and industry research we found that most of the

fashion houses that offer exclusive collection of women’s wears mainly

bring their supply or products from India and very few from Pakistan.

So we decided to use the combination of both Indian and Pakistani

apparel. We will offer an upscale and glamorous range of traditional

party-wear dresses for women such as sarees, salwar kameez and

lehengas, that are specifically designed for special occasions such as

weddings, formal dinner parties, social events etc. In addition to this,

we offer exclusive and unique collections for the special festivals like

Eid, Pohela Baishakh, and New Year etc. The key factors that can

increase our profit margin are the stable economic conditions of the

country, stable political condition, excellent communication procedure,

cultural and social background of Bangladesh and the also the ever-

changing youth who don’t follow a specific trend rather than they try to

set their own trend.

8

The Logo of the Debonair BD Collections:

We didn’t put any graphical symbolic picture to make our logo. We just

put our companies name and the hidden meaning of it. The name

Debonair will represent our products which mean Stylish, Charming,

Cultured, Dashing etc.

Debonair BD Collections’ Mission

Statement:

Our mission is to provide desired fashionable products to our valued customers,

strictly maintaining high Ethical Standards while we conduct Business and it will also

help our country to overcome its economic condition.

9

Vision of the organization:

The vision of the “Debonair BD Collections” is to establish us as world’s

one of the famous fair trade fashion house, and to remain market

leader throughout its business. We will expand our business in

international arena.

Industry Analysis:

After determining the market size which is 221400 households we

identified the location our target market mostly resides. This location

specific knowledge about our target market will help us to direct our

marketing and communication effort (billboard, newsletter, leaflet

distribution) into these specific areas. Next, we determine the

professional affiliation of our target market to better understand their

need, taste and preference, buying pattern, buying behavior. In the

process we identified the specific taste and preference of our target

market. Our market research which includes closely following Fashion

magazines and newspapers, websites, questionnaire survey, a small

focus group discussion, visiting our competitors and talking to the

employees, customers and observing their operation, services,

products, etc carefully and interviewing the top executives, owners of

the competitor firms as well as following customer buying pattern and

fashion trends we have formed a in- detail idea about the over all

industry. This in depth knowledge of the industry is what has made us

confident that we can successfully launch a new business in upscale

female party wear and exclusive clothing industry. Also the

opportunities associated with different industry trends like the short

life cycle of different fashion, style, design made it an interesting

business with many opportunities as well as the higher sales volume,

profit and higher growth rate compare to Men and Kid's wear segment

10

make the women wear segment the most profitable and lucrative to

invest for a new firm. We have also identified some new features like

launching Pakistani dresses, serving only the women wear and high

emphasis on marketing as key factors to become successful in this

competitive market. We have also identified our key competitor in the

market and find out in details about their strength and advantages

they have over us and the advantages we have over them.

Overall Industry information:

Target

Market

Size

Location ProfessionAge Taste

and

preferenc

e

Occasion Trends Profitability Growth

Rate

•221400

households

•Gulshan

•Banani

•DOHS

•Dhanmondi

•Uttara

•Baridhara

•Students

•Jobholders

•housewife

•business

women

•18-29

•30-39

•40+

•Quality

•Style

•Comfort

•Design

•Prestige

•Eid

•Wedding

•New Years

•Summer

•Winter

•Regular etc

•Shorter

life-cycle,

•Quickly

becomes

out-of-

fashion

•More sales

volume,

•profit

compare to

Men,

•Children.

High Growth

Rate

(According to

industry

insiders)

Some strategic indicators:

Key success

Factor in the

industry

Our

differentiatio

n strategy

Key

competitors

Competito

rs

advantag

es

Our advantages

•Differentiation,

•Brand Identity,

•Pakistani

cloths in

•Vasavi,

•Shoppers

•Establishe

d business,

•New product line,

•Higher effort given

11

•Market goodwill,

•Efficient Sales

force.

addition to

Indian cloths,

•Serving only

the women

wear market.

world, •Khan

brothers,

•Dressy dale

etc

•Existing

customer

relationshi

p

to our marketing

program.

External forces shaping the industry:Societal and Cultural Background: The societal and cultural factor

is one of the most motivating factors for this business. We have a long

cultural history regarding those types of outfits which will be provided

by Debonair BD Collections. Culturally the women of Bangladesh have

a great interest in sarees, kameez and lehengas for weddings, social

events or even for the formal dinner parties. Moreover, here people are

becoming more familiar to the global culture which is creating demand

for the apparel of other countries and culture especially which are

similar to our culture.

Trends: By analyzing the trend in the clothing sector it can found that

the women are becoming not only increasingly conscious about quality

but also about the fashion. Though it has been true for most of the

women youths are the major player regarding fashion and uniqueness.

These youths have their own creative style of dressing and believe in

setting a trend rather than following a trend set by others. They are

now not tied to only one kind of clothing item rather they are now

looking for varieties in the clothing items for different occasions.

Fashion and uniqueness has been determinant factors in case of

purchasing of attire.

Technological Enhancement: Because of globalization the latest

technologies are becoming more and more available which have made

the production procedure not only easy but also enhanced the

12

productivity streamlined with great quality. Technological

enhancement in the world of media has brought people more closely

than ever before. This has created a sense of fashion and uniqueness

in the people which can be a really motivating factor regarding this

business.

Economy: Economic factors like the level of disposable income,

buyer's confidence to spend on luxury goods are some crucial variable

related to this kind of business. Moreover, the business we are going to

start is very much dependent on the economic well being of the

country. If the economic condition is not suitable to our business, the

whole project may fail. In this analysis we have found that though a

global recession is going on the economic condition of Bangladesh has

been less affected compared to other countries and the economy is

now pretty stable. The economic growth is such that many people have

money to support their luxurious lifestyle. The overall growth rate in

economy and spending on luxurious items is good. Bangladesh is

entering into the global economy rapidly. So the overall economic

condition is suitable for this business.

13

Business Model (Company profile)

We will initially have only one shop in Gulshan-2 area. The shop will be

a rented 2-3 storey building in any major road. Our budget

accommodation for rent is high as we want to rent a place which is

easy to identify and access. The location should also be in consistent

with our business's upscale and exclusive image. The house we rent

will accommodate our store in the ground floor and first floor and it will

also accommodate our warehouse in the second floor. As we sell only

women wear which is generally available in free sizes (sarees and

kameez) we need not to keep the inventory of different size which will

significantly reduce the complexity and space requirement of our

inventory storage and management. Each floor in our shop will be

approximately 3000-4000 square feet. We will have a stuff of 30 slaes

persons in two shifts. Our sales person’s will be highly paid, efficient,

friendly, respectful and helpful to the customers. One of our key

success factors will be the efficiency of our sales force. Also 10 security

person for security, storefront services like opening the door and

greeting customer etc. We will have counter persons, cleaner,

inventory carry personnel etc. Our management team will consist of

the two partners who will look after marketing, sales, finance, supply

and inventory etc as well as a Managing Director / CEO to co-ordinate

14

all the different activity. We will have an engaging marketing program

that includes billboards, Television sponsorship of different ladies

shows like Fashion clothing, beauty program, gossip program etc. We

will also have a fashion and other lifestyle and general magazine

advertises, leaflets, special offers etc included in our marketing

program. We will have shelves; racks as well as display platforms

display our product. We will have different section for exclusive sarees,

kameez, regular saree and kameez and bridal sections. Lighting both

within and outside the shops are essential and we have put much

thinking and have allocated sufficient budget for lighting both within

and outside of the shop. We will have different sales, inventory,

accounting software and our computers will be networked to

accommodate and easily access sales data, inventory data, customer

data etc. We plan to custom made our software from local IT firms and

has sufficient budget for that. We will provide parking service, chairs to

sit inside the shop, different washrooms for male, female and

employees. We will offer service like offering to carrying the bags of

the customer if the customer have purchased multiple items and in

need of help carrying the bags, we will also provide pure drinking

water, after sales services include partial refund, product return with in

a specified period of the purchase. We will offer membership to any

customer who has made a more than average purchase in terms of

price, multiple purchase etc. We will keep contact information to later

inform our customer about new arrivals, special offers, collections,

discounts etc via newsletter, sms, email etc. In short, we though out

every details carefully and checked all the necessary requirements by

comparing with ourselves with our competitors.

Advertisement and Promotion:As we have decided to have a bigger, more attractive and eye catching

marketing program than our competitors to win our customers

15

advertising and promotion is at the heart of our marketing program.

We have identified billboard as a very effective means of reaching our

target customers who happen to resides in few specific locations we

have already identified. So, we will be concentrating specifically on our

target customers if we give our billboard advertisement in their areas

of residence. We will have billboards of 1000-1200 square feet in

Gulshan-1, 2, Banani, Dhanmondi, Uttara, Mohakhali. And 500-600

square feet billboards in Baridhara, DOHS, shegun bagicha, Eskaton,

shantinagar ares stc. The billboard advertises can have a range of rate

starting from 250-300 tk per square feet to 450 per square feet in

Gulshan and Banani area and more than 1000 tk in places like Airport

road, Mohakhlai etc.

We will also have Advertises in fashion magazines, lifestyle magazines

and general magazines like ICE Today, purple, Girl's fashion etc. In

magazine ads the rate start from 15000 tk per page and ends at 20000

tk per page in the case of ICE Today, the leading magazine with the

highest number of readership.

In television we will sponsor various programs which are specifically

popular among women like fashion and beautification, gossip

programs. We have a substantial budget for the television segment.

We will also distribute leaflets in places like Bashundhara city mall,

Jamuna city and other shopping malls, in Gulshan, Banani, Baridhara,

DOHS, Dhanmondi areas and, schools, universities, beauty parlor, gym

and spa, boutique etc.

We will also have special offers for our customers like highest

purchasers and lucky coupon winners getting free dinner for two in

Westin, family buffet dinner in places like Emanuels, Saffron, Topkapi

etc.

16

We will retain our customers by regularly updating them with new

arrivals, special discount, seasonal collections and sending

acknowledgement via sms, newsletter and emails.

Products: Our trendy, designer party wear for women with superior quality, style,

craftsmanship and with a high price tag makes a product that is

inherently exclusive in nature. Our product line will consists of the

following categories:

Sarees (exclusive and regular)

Salwar Kameez (exclusive and regular)

Bridal collections (for weddings, receptions etc.)

Festive collections (Eid, Pohela Baishakh etc)

Distribution / Place: We will deliver our product through our own

shopping outlet. Our shopping outlet will be located in Gulshan-2 area

and our shop will be a 3-storey outlet in a building that will

accommodate only our shop. This type of shop is the standard form of

outlet in the industry and our entire competitors pursue the exact

same model as the one we are planning to pursue.

17

Differentiation: Our competitor are buying Indian product, and we

as per our policy to differentiate ourselves from our competitor have

decided to sell Indian product as well as Pakistani product. Now for two

different products our value proposition will be different. For the

Pakistani product will be charging more prices for better quality and for

Indian product since our competitors sell Indian product our value

proposition will be charging less for the same product to get some

portion of the market share from the competitors.

Pricing strategy:

a) We got overall idea of our product’s price range from our

competitors. Like: Vasabi, khan’s brothers, shopper’s world. We

took their prices of exclusive saree, exclusive kameez and bridal

dresses as reference to get an idea.

b) We do survey of our target market. From there we got

information about our target market’s preference of prices. Like

we ask them for exclusive saree, kameez, regular saree, kameez

how much money they want to pay or they think feasible. They

give us information about the range they think as affordable.

18

c) We give good quality product. Of course the design, materials

are also exclusive. Our supplies are from India and Pakistan. So

we think the prices we have set are justified.

Financial Projection:

Ownership:

Organizational plan starts with the concept of the type of the

business. The ownership pattern of our business is mainly the

partnership business. “Debonair BD Collections” is a general

partnership business as we are two members who initiated the plan for

this business.

Cost of starting a business:

Cost of starting our organization is depending on the agreement of our

organization. The start up cost is little bit more than any other clothing

company. The starting cost is Taka 14 million for our organization

including all other costs related to organization. Primarily the start up

19

cost will be provided by the owners of our organization & loan from

bank.

Start-up cost:

At the starting point we need to spend money for getting

government, to do registration and get license for the company and

also we have to register our logo in Patent and Trademark office. This

cost will be like:

Start-Up Cost:

Particulars AmountLand Lease yearly payment 720,000Computer hardware and software 1,000,000Miscellaneous Expense (Security Camera+ Furniture + Interior Design)

600,000

Total 2,320,000

Other start-up Cost:

Particulars AmountReg. & License 500,000Registration logo 300,000

20

Building Cost 10,000,000

Total 10,800,000

Machinery, land & other Costs of the company

(Yearly):

Machinery, land & other start-up Cost (Yearly):

Particulars AmountRent 960,000Bills (utilities, phone, internet, hosting etc) 15,00,000Operational costs (accounting, legal fees, insurance, IP etc) 600,000Marketing costs 400,000Packaging /Boxes 100,000Business Supplies 700,000Bank Card Machine and Supplies 300,000Advertisement cost 12,00,000Transportation Cost 500,000

Total 3,560,000

Salary Expenses (Yearly):

21

Salary Expenses:

Particulars Employer's NO

Salary Month Amount

Purchase Dept. 2 5000 12 120000Store Keeper 3 5000 12 180000R&D Dept. (2 Scientist) 2 28000 12 672000Sales Representative 30 10000 12 3600000Purchase Manager 2 15000 12 360000Production Manager 2 17000 12 408000Sales Manager 1 18000 12 216000Accountant 2 15000 12 360000Security Guard & Cleaner 15 5000 12 900000Office Pion 2 4000 12 96000

TOTAL SALLERY(Monthly)

6912000

Revenue (Sales Forecast) of the company:

Year-1

ProductQuantity

Per Price

Total Revenue

Regular Sarees 8000 15000 120000000

Exclusive Sarees 10000 30000 300000000

Regular Salwar Kameez 15000 8000 120000000

Exclusive Salwar Kameez 10000 20000 200000000Bridal collections (for weddings, receptions etc.) 6000 60000 360000000Festive collections (Eid, Pohela Baishakh etc) 5000 6000 30000000Seasonal collections (summer, spring and winter collections). 12000 8000 96000000

Total Revenue= 122600000

0

Year-2 Product Quantit Per Total

22

y Price RevenueRegular Sarees 10000 15000 150000000





Year-3

ProductQuantity

Per Price

Total Revenue

Regular Sarees 20000 15000 300000000





Cost of Goods Sold

Cost Of Goods Sold:

Year1 year2 year3

Particulars Amount Amount Amount

Transpotation cost 2,00

0,000 1,50

0,000 1,00

0,000 Labour cost 500000 400000 400000Miscellaneous 200,000 200,000 200,000Cost of goods sold 2700000 2100000 1600000

23

Total= 5,400,000 4,200,000 3,200,000

Incremental Cash Flow of the Company

Incremental Cash Flow:

Particular Year-0 Year-1 Year-2 Year-3

Revenue 122600000

0 1720000000 2780000000

COGS 5,400,000

4,200,000

3,200,000

Gross Profit

1,220,600,000

1,715,800,000

2,776,800,000

24

Expenses

Setup cost2,320,00

0

Other Start-up cost10,800,0

00 Expenses: Salary 6912000 6912000 6912000Rent 960,000 960,000 960,000Bills (utilities, phone, internet, hosting etc)

15,00,000

15,00,000 15,00,000

Operational costs (accounting, legal fees, insurance, IP etc)

600,000 600,000 600,000

Marketing costs 400,000 400,000 400,000Packaging /Boxes 100,000 100,000 100,000Business Supplies 700,000 700,000 700,000Bank Card Machine and Supplies

300,000 300,000 300,000

Advertisement cost 12,00,000 12,00,000 12,00,000Transportation Cost 500,000 500,000 500,000

Total expense: 10472000 10472000 10472000

EBT

1,210,128,000

1,705,328,000

2,766,328,000

Tax-25%

302,532,000

426,332,000

691,582,000

Net Income

907,596,000

1,278,996,000

2,074,746,000

Dep. 500,000

500,000

500,000

Cash flow operation13,120,

000

907,096,000

1,278,496,000

2,074,246,000

Beta Calculation for the Company:

Company Name Beta

25

Vasavi 0.664394645Shoppers world 1.148038585

Khan brothers 0.317446026

Dressy dale 1.046116601Beta coefficient 0.793998964

Risk free rate 12

Market risk 15

Discount rate 14.38

Calculating Capital Budgeting Tools

Particulars Cash flow CCF

Discounted CF DCCF

Year 0 (13,12

0,000)

Year1 907,09

6,000 907,09

6,000 793,05

4,730 793,054

,730

Year2 1,278,49

6,000 2185592000 977,23

5,396 1770290126

Year3 2,074,24

6,000 4259838000 1,386,14

9,219 3156439345

NPV 3,143,3

19,345

PBP

0.01 DPBP 0.02 IRR 69.55

PI

240.58

CAPITAL BUDGETING TECHNIQUES

Through selection of the most appropriate investment alternatives,

capital investment decision can be taken into consideration. This can

26

be done using different techniques. Following are the various

techniques:

Net Present Value (NPV): NPV of a project refers to the excess

of present value of future cash flows from a project over the

present value of investment for the same.

Here Cft = Cash flows in different times

t = No. of years

k = Discounting rate

I0 = Initial investment

In this case we have used 14.38% as the discount rate. Using the excel worksheet we get the NPV of the project is = 3,143,319,345.

Comment: If the project NPV is positive, we will accept the

project. So here we can see that our NPV is positive so we will

except the project

Pay Back Period: This refers the length of time required to

recover the cost of an investment. According to this technique, a

project that requires minimum time to recover the investment

cash outlay in nominal amount is the best alternative.

The PBP of the project will be = 0 + {(13120000-00)/907096000}

= 0.01 years

Comment: As the pay back period is less than 1 year. So the project should be taken.

Discounted Pay Back Period: This is an investment decision

rule where future cash flows are discounted at an interest rate

and then one determines how long it takes for the sum of the

discounted cash flows to equal the initial investment. In this

27

project it is found that the sum of the discounted cash flow is

0.02.

Comment: As the discounted pay back period is less than 1 year. So the project should be taken.

The Internal Rate of Return (IRR): IRR is the internal rate of

return at which a project’s future cash inflows are discounted

and they will become equal to the present value of its

investment. Thus the IRR is a rate that implies the implicit rate

one investor can expect to earn from the investment being

considered for investment.

Although IRR can be calculated using the interpolation method, in this

case we have calculated it using the excel work sheet. IRR of this

project is 69.55%.

Comments: As the IRR is greater than the discount rate

(14.38%), so we should accept the project.

Profitability Index (PI): This is the index which attempts to identify

the relationship between the costs and benefits of a proposed

project. By using excel our calculated PI is 240.58.

28

Comment: A ratio of 1.0 is logically the lowest acceptable

measure on the index. Any value lower than 1.0, indicates

that the project's NPV is less than the initial investment. As PI

of the project is greater than 1, so we should accept the

project.

Calculating Discounting Rate

The formula of calculating discount rate is:

Discount Rate =

= 12+ 0.793998964 (15-12)

= 14.38%

Company Name Beta

Vasavi 0.664394645Shoppers world 1.148038585

Khan brothers 0.317446026

Dressy dale 1.046116601Beta coefficient 0.793998964

Risk free rate 12

Market risk 15

Discount rate 14.38

Scenario and Sensitivity Analysis

29

The result of the scenario and sensitivity analysis found from the

calculation in the spreadsheet has been attached to the appendix part

of our assignment paper.

Findings and Recommendations

By using traditional techniques we get the following results:

NPV 3,143,3

19,345

PBP

0.01 DPBP 0.02IRR 69.55%

PI

240.58

Net present value of the project is positive.

Payback period is less than four years.

Discount rate payback period is less than 1 year.

IRR is 69.55% whereas our discounting rate is 14.38%.

PI is 240.58 which is greater than 1 indicating it is a good

project.

As a result, we should accept the project.

30

Conclusion

As entrepreneurs, we have to go through a lot of stress in

order to achieve the desire destination. We make our plan enriched by

including uniqueness and connection of reality. We made financial plan

for three years. We will gain market share and able to establish the

brand image in our targeted customers mind. Net Present Value of our

project is positive. So we should accept the project.

The success of a business depends on the capital budgeting decisions

taken by the management. The management of a company should

analyze various factors before taking a large project. Firstly,

management should always keep in mind that capital expenditures

require large outlays of funds. Secondly, firms should find modes to

ascertain the best way to raise and repay the funds. The management

should also keep in mind that capital budgeting requires a long-term

commitment.

31

Capital Budgeting

Documents

future cash

formal dinner

debonair bd

sell indian

capital budgeting

key factors

pakistani

discount rate