Linked from

The 20 pages that link to Capital budgeting, each with the reason it gives.

• Opportunity costRelated: Choosing one project means forgoing returns available from competing investments.

• Discount rateRelated: The discount rate can change which investment projects appear worthwhile.

• Cost of capitalRelated: A company compares expected project returns with the relevant cost of capital.

• Resource allocationRelated: Organizations rank competing projects when investment funds are limited.

• Time value of moneyRelated: Discounted cash flows help determine whether a project’s future returns justify its cost.

• Cash flowRelated: Projected cash flows help compare investment costs with future benefits.

• Present valueRelated: Companies compare project costs with discounted expected benefits.

• Financial return on investmentRelated: ROI can inform decisions about which capital projects merit funding.

• Management accountingRelated: Investment appraisal applies accounting forecasts to choices with long-lasting resource consequences.

• Fixed costRelated: Investments often commit organizations to fixed operating costs and capacity.

• Financial economicsRelated: It carries present-value analysis into real investment decisions.

• Business economicsRelated: It applies economic reasoning to decisions about factories, equipment, and other costly projects.

• Engineering economicsRelated: Engineering proposals compete for limited funds through investment appraisal.

• Financial managementRelated: It helps determine which projects deserve scarce organizational funds.

• Managerial economicsRelated: Economic forecasts and discounted cash flows help compare investment opportunities.

• Fisher separation theoremRelated: The theorem supports evaluating projects by their contribution to firm value rather than owners’ personal preferences.

• Infrastructure investment (public finance)Related: Governments use it to compare infrastructure projects and allocate limited capital.