A comparative study of capital budgeting and capital rationing models as an analysis for capital investment decision

Abstract

The process of planning and evaluating proposals for investments is called capital budgeting. Capital budgeting decisions are important because large amount of money are committed for long periods of time and because these type of decision are often difficult or impossible to reverse once the funds have been committed. This study surveys different models and techniques that are used to solve several types of capital budgeting problems These types are of simple capital budgeting and capital rationing; under conditions of certainty and uncertainty The analysis helps on the difficult and critical decisions management has to make