Capital Budgeting Interview Result

African Journal of Business Management Vol.6 (32), pp. 9279-9292, 15 August, 2012 addressable online at http://www.academicjournals.org/AJBM DOI: 10.5897/AJBM12.747 ISSN 1993-8233 ©2012 Academic Journals Full duration inquiry Paper A survey of hood budgeting techniques utilise by listed mining companies in mho Africa Vongai Maroyi and Huibrecht Margargontha van der Poll* University of south Africa, Pretoria, southward Africa. Accepted 23 July, 2012 Capital budgeting is crucial in the maximisation of shareholder value as it depends on the peachy budgeting decisions made by the managers. The capital budgeting techniques used by South African mines listed on the Johannesburg Securities Exchange (JSE) and the reasons behind their use were investigated. Questionnaires were conducted during the full point consonant of March to May 2011 to gather data. The results also indicated that the last(a) bring in value (NPV) (69%), the internal outrank of chase away (IRR) (46%) and the requital closure (PB) (23%) are the most common techniques used to evaluate major projects. The main reason for the use of the NPV was its transcendency as it accurately takes into account the time value of money.

The IRR system is used owe to its ability to rank projects and to indicate the veritable return of apiece project, thereby informing managers whether an investment leave increase the societys value. The results indicated that the continual use of PB was based on the simplicity of the technique. Financial officers (FOs) should also play use of early(a) techniques for example, discount ed payback period (DPB), profitability index! (PI) and the original options which are of valuable in determining the feasibility of projects. mention run-in: Capital budgeting techniques, net present value, internal rate of return, payback period, mining companies, South Africa. INTRODUCTION Based on the fast change in technology, successful mining companies whitethorn destiny to be strategically positioned to take advantage of the changes in operating...If you demand to get a full essay, order it on our website: BestEssayCheap.com

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