--%>
Assignment Help - homework help

Drawbacks of capital budgeting

Write down the drawbacks of capital budgeting?

E

Expert

Verified

Capital budgeting drawbacks are illustrated below :-
   
i) It has long term executions which cannot be employed in short term and it is employed as operations of the business. An incorrect decision in the early stages can influence the long-term stability of the company. The operating cost gets raised when the investment of fixed assets is more than necessary.

ii) Inadequate investment makes it hard for the company to raise it budget and the capital.

iii) Capital budgeting engages huge number of funds so the decision has to be taken cautiously.

iv) Decisions in capital budgeting are not adjustable as it is difficult to locate the market for capital goods.

   Related Questions in Business Economics

  • Q : Comparative Advantage-Mutual exchange

    Mutually beneficial exchange is probable whenever relative production costs vary previous to trade, is a manner to state the law of: (1) Positive profits from trade. (2) Comparative benefit. (3) Specialization and Division. (4) Purchasing power parity

    		•
  • Q : Illustrate the characteristics of the

    Illustrate the characteristics of the Market System?

    		•
  • Q : Who is a normal resident Normal

    Normal resident: The persons or an institution who lives in a country and whose centre of interest lies in that country is termed as a normal resident of that country.

    		•
  • Q : Heterodox pricing process Compare the

    Compare the costing and pricing process of heterodox pricing process to the procedures utilized in neoclassical microeconomics to set prices.  In what ways are heterodox prices altered from neoclassical prices?

    		•
  • Q : Illustrate Freedom of enterprise and

    Illustrate Freedom of enterprise and choice exist?

    		•
  • Q : Contestable Markets The least probable

    The least probable of the given industries to be a contestable market is: (1) video rentals. (2) pizza delivery. (3) cable television. (4) trucking. Can someone explain/help me with best solution about problem of <

    		•
  • Q : Producers on the best combinations of

    How did producers decide on the best combinations of resources to use?  Who made these resources available, and why?

    		•
  • Q : Exchange rate in purchasing power parity

    Question: In June 2005, a Big Mac sold for 6,000 pesos in Colombia and $3.00 in the United States.  The exchange rate in June 2005 was 2,300 pesos per US Dollar.  So, on Big Mac purchasing power parity gr

    		•
  • Q : Sources of not tax revenue Provide some

    Provide some sources of not tax revenue? Answer: Escheat, income from public enterprises, special assessment, fees and fines and so on.

    		•
  • Q : Introduction of the term Control

    Give a brief introduction of the term Control Principle?

    		•