Importance Of Payback Method In Capital Budgeting Decision
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Importance Of Payback Method In Capital Budgeting Decision
School of Management
Blekinge Institute of Technology
THE IMPORTANCE OF THE PAYBACK METHOD IN CAPITAL BUDGETING DECISION.
By
Alaba Femi, AWOMEWE & Oludele Olawale, OGUNDELE
Supervisor: Anders Hederstierna
Thesis for the Master’s degree in Business Administration Fall/Spring 2008
THE IMPORTANCE OF THE PAYBACK METHOD IN CAPITAL BUDGETING DECISION.
By
Alaba Femi, AWOMEWE & Oludele Olawale, OGUNDELE
A thesis submitted in partial fulfillment of the requirements for the degree of MBA (Master of Business Administration)
Blekinge Institute of Technology
2008
Supervisor Anders Hederstierna
ii
Abstract Title: The importance of the Payback method in Capital budgeting decision.
Authors: Alaba Femi, Awomewe and Oludele Olawale, Ogundele
Supervisor: Anders Hederstierna
Department: School of Management, Blekinge Institute of Technology
Course: Master’s thesis in business administration, 15 credits (ECTS).
Background and Problem Discussion: The capital budgeting decision has been a very typical issue in the sustenance of a company. Several companies have lost their identity or liquidated due to wrong capital budgeting decision they made at one particular time or the other. Based on these prevalent problems in industries and the effect of globalisation on industries, it is important to use effective method to analyse investment before decision is made. Capital budgeting is extremely important because the decision made involve the direction and opportunity for future growth of the organisation. One of the traditional methods commonly used for capital investment appraisal by some organizations is the payback method, although this method has been criticized by academicians that it does not include the future cash flow and do not measure profitability. The wide acceptance of this method by practicing managers, has called for investigation as why is the method is still popularly used in organizations. In this thesis work, we...
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- Date Submitted: 06/05/2009 02:02 PM
- Category: Business
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