Discuss the method of capital budgeting that you would use in your own
business. Justify your decision.
Capital budgeting is the process by which various investment alternatives can be evaluated. There are various capital budgeting techniques that can be used for proposal assessment such as net present value method, internal rate of return method, payback period method, profitability index, etc.
Net present value method is the most appropriate method use for making capital budgeting decisions which can be selected and applied in the business. It is considered more appropriate method than other methods as it considers the time value of money. Time value of money states that the value of dollar earned today is nore than the value of same amount of dollar earned tomorrow.
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