An Analysis of Evaluating Investment Decision using Capital Budgeting Techniques: A Survey of Manufacturing Industry

ABSTRACT

This study aimed at knowing the application of CBT in manufacturing industry in Sangli and Kolhapur district of Maharashtra, India. This research is subjective and adopted inductive approach in order to answering research questions. It also analyzes the use of CBT for evaluation of investment decisions. The sample size for the study was 50 firms selected as per convenience sampling method from the targeted area. The researcher collected primary data using questionnaires. The collected data was checked for completeness, coded and captured into MS Excel for analysis. Descriptive and inferential statistics were used to analyze data by way of means (measure of central tendency) and standard deviation (measure of dispersion). The study found out that manufacturing companies rely on capital budgeting techniques in decision making such as Replacement, Lease or Buy, Mutually Exclusive Projects, Independent Projects and Contingent Projects. The study concludes that capital budgeting techniques have correlation with financial performance of companies.

FULL TEXT