Advanced cost Accounting

               Unit-ll  Capital Budgeting  Decisions                        Capital budgeting is a company’s formal process used for evaluating potential expenditures or investments that are significant in amount. It involves the decision to invest the current funds for addition, disposition, modification or replacement of fixed assets. The large expenditures include the purchase of fixed assets like land and building, newequipments, rebuilding or replacing existing equipments, research and development, etc. The large amounts spent for these types of projects are known as capital expenditures. Capital Budgeting is a tool for maximizing a company’s future profits since most companies are able to manage only a limited number of large projects at any one time.                 Capital budgeting usually involves calculation of each project’s future accounting profit by period, the cash flow by period, the present value of cash flows after considering time value of money, the numbe

Introduction : Financial management is comprised of two words , finance and management. The management aspect relates to planning, sourcing, allocating& controlling, while finance relates to financial resources which are always limited, contain value & have alternative usuage. So, finance as a resource needs proper management so that out of a given input, maximum output value can be derived. Now, it will depend on the skill of experts & managers.           Financial management deals with procurement of funds & effective utilisation of funds in business. Definition : According to I.M Pandey --- Financial Management is that managerial activity which is concerned with planning & controlling of the firm's financial resources.      The various characteristics of financial management are as follows : 1. Financial management involves management of financial resources. 2. It relates to planning, raising, acquiring, administering, allocating&  controlling of