What Are The Advantages And Disadvantages Of Capital Budgeting

Advantages and disadvantages of capital budgeting

Katz, J. (2015). Financial web. Retrieved September 27, 2016, from finweb: http://www.finweb.com/financial-planning/advantages-and-disadvantages-of-capital-budgeting.html#axzz4LxjXjcT4

In this website it about the advantages and disadvantages of the capital budgeting. Also, everything in the world have good and bad things even if it a perfect thing it has some of disadvantages. Capital budgeting is essential thing to the managers and leaders of the company when the they rating the opportunities for investment of the company’s capital. First, the advantages of capital budgeting. First, help the company to understand different risks that involves in an investment opportunity and how these risk affect the return of the company. Which is mean the capital budgeting help the company to reduce or avoid the risk that they have face it. Also, its help the company to estimate which investment option would yield the best possible return. To be more clear, the investment is very important for the company to help get the best return. Moreover, its help the company to make long term strategic investment. Furthermore, the company can take the method from different techniques of capital budgeting to decide if it is good for take the project or not. However, there are many disadvantages of capital budgeting such as, sometime the techniques are depend on the estimations assumption as the future would remain uncertain. Also,