--%>
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 : Gross domestic product Question Would

    Question Would "Victory Points" be a measure of player's "GDP"? If not, then how would you calculate a player's GDP?

  • Q : Cchange in demand and a change in the

    Distinguish between a change in demand and a change in the quantity demanded?

    		•
  • Q : Help How is a shift in demand reflected

    How is a shift in demand reflected in a demand equation? How is a shift in supply reflected in a supply equation? How is a movement along a demand (supply) curve reflected in a demand (supply) equation?

    		•
  • Q : Independent queue vs. pooled queue

    Instruction: McDonald's vs. Burger King - these two fast food chains use different waiting line design: Independent queue vs. pooled queue. To compare the two different queue systems on equal footing, let's assume that we pick a McDonald's sto

    		•
  • Q : Individuals self-interests and broader

    A natural harmony among individuals serving their own self-interests and the broader interests of society was the main theme of the theories of __________, although this concept was not accepted through _________. Determine the correct answer from given options: (w) K

    		•
  • Q : What are patent rights Patent rights :

    Patent rights: It is a unique license or right granted to a company or an Individual to make a specific product or utilize a specific technology.

    		•
  • Q : Introduction of the term Control Factor

    Give a brief introduction of the term Control Factor?

    		•
  • Q : Describe Low financial leverage and low

    Describe briefly Low financial leverage, low operating leverage?

    		•
  • Q : Perfect competition leads the economic

    The perfectly competitive market structure benefits consumers since: w) firms do not generate goods at the lowest possible price within the long run. x) firms are forced through competitive pressure to be as efficient as possible. y) firms add a much

    		•
  • Q : Describe composite cost of capital

    Briefly describe composite cost of capital? And also describe the procedure to calculate composite cost of capital?

    		•