scholarly journals Computing Capital Budgeting for Banking Sector

2021 ◽  
Vol 58 (2) ◽  
pp. 6502-6508
Author(s):  
Sushain Koul, Dr. Parag Ravikant Kaveri
Keyword(s):  
Financial Management ◽  
Banking Sector ◽  
Net Present Value ◽  
Average Rate ◽  
Capital Budgeting ◽  
Rate Of Return ◽  
Present Value ◽  
Banking Organization ◽  
Long Run ◽  
Selection Of

Perhaps the most difficult hurdle which companies come across is the selection of the project which is beneficial to the organization in the long-run and also increases the present value of the shareholders. This is where Capital Budgeting comes into play. Capital Budgeting is one of the most important areas of financial management. This paper gives an overview of what capital budgeting is, what different types of techniques comes under capital budgeting and how to represent capital budgeting technique algorithmically. In this paper we also throw some light on what the results of various capital budgeting techniques will be if any banking organization follows these techniques and compare those results. These techniques namely as Payback Period (PP), Average Rate of Return (ARR), Net Present Value (NPV), Profitability Index (PI) and Internal Rate of Return (IRR) are used to evaluate projects.

scholarly journals Analisis Kelayakan Pengembangan Usaha Pasta Kangen Jupiter dan Mogot Jakarta Barat dengan Menggunakan Metode Capital Budgeting Tahun 2019-2023

2021 ◽  
Vol 1 (1) ◽  
pp. 9-14
Author(s):  
Ni Puthu Eka Wardani Haliasih ◽  
◽  
Pambuko Naryoto ◽  
Keyword(s):  
Research Methodology ◽  
Net Present Value ◽  
Average Rate ◽  
Capital Budgeting ◽  
Payback Period ◽  
Rate Of Return ◽  
Internal Rate Of Return ◽  
Present Value ◽  
Internal Rate

Abstract Purpose: This study aimed to determine the feasibility of establishing the Pasta Kangen Jupiter dan Mogot Jakarta Barat in West Jakarta. Research methodology: The assessment is reviewed with Capital Budgeting in Optimistic, Moderate, and Pessimistic versions. Several methods include Payback Period, Net Present Value, Profitability Index, Average Rate of Return, Internal Rate of Return, dan Discounted Payback Period. Results: Based on the results of calculations using the Optimistic and Moderate Version of Capital Budgeting method, Pasta Kangen Jupiter Daan Mogot Jakarta Barat business in West Jakarta is feasible to run, while the Pessimistic Version is not feasible to run.

ANALISIS CAPITAL BUDGETING TERHADAP KELAYAKAN INVESTASI AKTIVA TETAP PADA PT. KHARISMA ARTA ABADI GUNA LUWUK KABUPATEN BANGGAI

2019 ◽  
Vol 2 (1) ◽  
pp. 70
Author(s):  
Irwan Moridu ◽  
Sitti Damayanti Adista
Keyword(s):  
Net Present Value ◽  
Average Rate ◽  
Capital Budgeting ◽  
Payback Period ◽  
Rate Of Return ◽  
Internal Rate Of Return ◽  
Present Value ◽  
Internal Rate

Tujuan yang ingin dicapai dengan diadakannya penelitian ini adalah untuk menganalisis kelayakan rencana investasi asset tetap yang berupa penggantian mesin baru pada PT. Kharisma abadi arta guna luwuk. Adapun teknik yang digunakan dalam penelitian ini adalah deskriptif sedangkan pendekatan yang digunakan adalan kuantitatif, analisis data menggunakan laporan arus kas untuk menghitung Payback Period,Average Rate Of Return,Net Present Value, Profitability index,Internal Rate Of Return. Dari hasil analisis data diperoleh hasil bahwa untuk PP 1 tahun 9 bulan sehingga proyek di terima, untuk ARR dieroleh nilai 51,84%>25% maka proyek investasi diterima,untuk NPV diperoleh nilai positif Rp. 3.825.223.229 maka proyek diterima, dan untuk PI diperoleh nilai 3,5>1 maka investasi layak dilaksanakan. Dari penelitian yang telah dilakukan untuk mengantisipasi kerugian-kerugian yang tidak diharapkan oleh pihak PT. Kharisma Abadi Arta Guna harus melakukan analisis kelayakan investasi sebelum melakukan investasi , agar dapat mengurangi resiko yang terjadi.

Measures of Project Worth

2018 ◽  
pp. 137-155
Keyword(s):  
Net Present Value ◽  
Average Rate ◽  
Relevant Literature ◽  
Capital Budgeting ◽  
Rate Of Return ◽  
Present Value ◽  
Benefit Cost Analysis ◽  
Fixed Assets ◽  
Benefit Cost ◽  
Production Period

Investments usually involve the procurement of assets for which using marginal analysis may not be adequate in evaluating their worth to an economic activity in an enterprise. Furthermore, all the costs involved in the purchase of fixed assets are not ordinarily charged to the account of a production period. It is against his background that this chapter focuses on the concept of measures of project worth with a view to enabling farmers to obviate related problems in capital budgeting, non-discounted measures of project worth (pay-back period, average rate of return), discounted measures of project worth, benefit-cost analysis, net present value, decision criteria in using the net present value, internal rate of return, calculating the IRR, and interpreting the IRR. Discussions were based on a review of related and relevant literature. Conclusions and recommendations are made based on the discussions.

TINJAUAN STUDI KELAYAKAN USAHA BADAN USAHA MILIK DESA (NAGARI) KAMANG HILIA SEJAHTERA KENAGARIAN KAMANG HILIA, KECAMATAN KAMANG MAGEK, KABUPATEN AGAM, PROVINSI SUMATERA BARAT

2018 ◽  
Vol 3 (2) ◽  
pp. 160
Author(s):  
Halkadri Fitra ◽  
Salma Taqwa ◽  
Charoline Cheisviyanny ◽  
Abel Tasman ◽  
Nurzi Sebrina
Keyword(s):  
Cash Flow ◽  
Net Present Value ◽  
Average Rate ◽  
Flow Analysis ◽  
Payback Period ◽  
Rate Of Return ◽  
Internal Rate Of Return ◽  
Present Value ◽  
Internal Rate

Penelitian ini bertujuan untuk melihat kelayakan aspek keuangan usaha grosir sembako Badan Usaha Milik Desa (Nagari) Kamang Hilia Sejahtera di Kenagarian Kamang Hilia Kecamatan Kamang Magek Kabupaten Agam Provinsi Sumatera Barat yang dilakukan pada tahun 2018. Penelitian bersifat deskriptif kuantitatif dengan menggunakan metode cash flow analysis, payback period, net present value, profitability index, internal rate of return, dan average rate of return. Hasil penelitian menunjukkan bahwa nilai net cash flow Badan Usaha Milik Desa (Nagari) Kamang Hilia Sejahtera adalah positif yaitu Rp.21.774.000, nilai payback period adalah 1,15 tahun, nilai net present value positif sebesar Rp.10.680.034,47, nilai profitability index adalah positif 1,37, sedangkan nilai internal rate of return adalah 46,7% dan nilai average rate of return adalah 57,23%. Berdasarkan standar penilaian maka semua metode yang digunakan memberikan kesimpulan bahwa usaha grosir sembako milik Badan Usaha Milik Desa (Nagari) Kamang Hilia Sejahtera dalam kategori layak untuk dilaksanakan.

scholarly journals Evaluation of Investment Projects: A Case from Turkish Cement Sector

2016 ◽  
Author(s):  
Miyase Karabulut ◽  
Sıtkı Sönmezer ◽  
Vedat Zeki Yenen ◽  
Zeynep Emir
Keyword(s):  
Qualitative Research ◽  
Net Present Value ◽  
Capital Budgeting ◽  
Rate Of Return ◽  
Internal Rate Of Return ◽  
Present Value ◽  
Investment Projects ◽  
Preliminary Results ◽  
Internal Rate ◽  
Exclusive Or

Capital budgeting is crucial for firms that have projects to evaluate especially when the projects are mutually exclusive or financing is scarce. The aim of the study is to determining the most widely used methodologies in capital budgeting decisions and their effectiveness. A qualitative research will provide cement sector specific examples in assessing industry projects and compares the methods of Net Present Value, İnternal rate of Return, Pay-back period, discounted pay-back period and MIRR. Each method is briefly discussed and its drawbacks and advantages are mentioned in detail. Other sectors are also examined in terms of capital budgeting. Our preliminary results indicate that net present value method dominates capital budgeting decisions in the sectors under study.

scholarly journals ANALISIS PENGANGGARAN MODAL PADA PT ULTRAJAYA MILK INDUSTRY Tbk. TAHUN 2013-2017

2018 ◽  
Vol 14 (2) ◽  
pp. 101-110
Author(s):  
Eka Lusvita Wulandari ◽  
Lily Rahmawati Harahap
Keyword(s):  
Opportunity Cost ◽  
Net Present Value ◽  
Average Rate ◽  
Capital Budgeting ◽  
Payback Period ◽  
Investment Analysis ◽  
Present Value ◽  
Investment Opportunities ◽  
Milk Industry ◽  
Real Losses

Capital budgeting in practice is intended to conduct an investment analysis of some available investment alternatives, and then determine or choose the most profitable investment. Inappropriateness in determining investment options will result in losses of either real losses or losses due to loss of opportunity to gain an opportunity cost that can actually be realized. The investment analysis will select the available investment opportunities, so that investment can be selected that will provide the greatest benefit of every dollar invested. Capital budgeting techniques can be analyzed by appraisal method of investment as follows: Average Rate of Return, Payback Period , Net Present Value, and Profitability Index.

scholarly journals Reinvestment Bias When Analyzing Mutually Exclusive Assets

2011 ◽  
Vol 2 (3) ◽  
pp. 71
Author(s):  
Robert J. Sweeney
Keyword(s):  
Net Present Value ◽  
Capital Budgeting ◽  
Cash Flows ◽  
Rate Of Return ◽  
Internal Rate Of Return ◽  
Present Value ◽  
Internal Rate ◽  
Current Period ◽  
The Cost ◽  
Flows Over Time

Capital budgeting decisions generally involve the commitment of resources in the current period to secure positive cash flows over time that generate a rate of return in excess of the cost of the funds invested. The most common techniques used to perform this analysis are the Net Present Value (NPV) and the Internal Rate of Return (IRR).Conceptually, these two techniques are substitutable; i.e. the resulting decision from a NPV analysis is identical to the decision from an IRR analysis. In practice, however, the NPV and the IRR can, on occasion, produce conflicting decisions. Specifically, when analyzing mutually exclusive assets the Net Present Value can support one asset while the Internal Rate of Return supports the other. The purpose of this paper is twofold; first, to highlight structural deficiencies in the conventional application of the NPV and the IRR, and second, to demonstrate a procedure to correct for these structural errors.

scholarly journals Use of Probabilistic Cash Flows in Analyzing Investments Under Conditions of Risk and Uncertainty

1976 ◽  
Vol 8 (2) ◽  
pp. 19-24 ◽  
Author(s):  
James W. Richardson ◽  
Harry P. Mapp
Keyword(s):  
Net Present Value ◽  
Average Rate ◽  
Capital Budgeting ◽  
Cash Flows ◽  
Rate Of Return ◽  
Internal Rate Of Return ◽  
Risk And Uncertainty ◽  
Small Farm ◽  
Perfect Knowledge ◽  
Net Returns

Managers of business firms, large or small, farm or nonfarm, must make investment decisions under conditions of risk and uncertainty. However, in evaluating investments, the assumption of perfect knowledge has often been used to simplify the analysis. For example, an estimate of average annual net returns is frequently discounted into perpetuity to evaluate a real estate investment alternative. Capital budgeting literature suggests a number of approaches to evaluating alternative investments. However, use of concepts such as the payback period, average rate of return, internal rate of return and net present value embodies the assumption of perfect knowledge.

ANALISIS KELAYAKAN BISNIS CAFE PADA KHALIZTA COFFEE & RESTO KOTA PEMATANGSIANTAR

2020 ◽  
Vol 2 (2) ◽  
pp. 148-158
Author(s):  
Lika Pasaribu ◽  
Liharman Saragih
Keyword(s):  
Net Present Value ◽  
Average Rate ◽  
Payback Period ◽  
Rate Of Return ◽  
Internal Rate Of Return ◽  
Present Value ◽  
Internal Rate

Studi kelayakan bisnis merupakan penelitian yang bertujuan untuk memutuskan apakah sebuah ide bisnis layak atau tidak. Cafe Khalizta Coffee & Resto Kota Pematangsiantar merupakan salah satu café yang baru berjalan selama 11 bulan, sehingga akan diuji apakah usaha tersebut telah layak berdasarkan aspek keuangan. Berdasarkan hasil analisis didapat bahwa aspek keuangan  dikatakan layak, dengan nilai Payback Period (PP) 1 tahun 6 bulan 23 hari. Nilai Net Present Value (NPV) 1.186.386.674, nilai Profitability Index (PI) 2,68, nilai Internal Rate of Return (IRR) sebesar 101%,  nilai Average Rate of Return (ARR) 108 %  aspek keuangan dinyatakan layak dan dapat dilanjutkan

scholarly journals ANALYZE REFRIGERATOR TOOLING INVESTMENT LIVIA MODEL AT PT LG ELECTRONICS INDONESIA

2008 ◽  
Vol 1 (1) ◽  
pp. 1-24
Author(s):  
Apit Supriyadi ◽  
Mini Wijaya ◽  
Tedy Fardiansyah
Keyword(s):  
Sensitivity Analysis ◽  
Net Present Value ◽  
Current Method ◽  
Capital Budgeting ◽  
Rate Of Return ◽  
Primary Methods ◽  
Capital Budget ◽  
Strategic Direction ◽  
Long Run ◽  
The One

For a large firm like PT LG Electronics Indonesia (LGEIN), which has resulted in high manufacturing utilization, require a few percent reductions in component prices every year. The one of potential project for cost reduction is tooling investment. After Livia is produced and the expenditure of new tooling is made, it is continually faced with the problem that current method computing profits are conventional without considering the expenditure of tooling in the long run. Finally, a firm’s capital budgeting decisions is needed because it defines its strategic direction. Four primary methods in the capital budget to decide whether or not the project should be accepted are: discounted payback, net present value, internal rate of return and profitability index. In addition, we use sensitivity analysis to indicate which factor has significant interfere with the project. The results generated that discounted payback is just 2 year 6 months less life of the project for 3 years, NPV generated positive result $3,502,387, and an IRR of this project is 25% greater than required rate of return 10% and profitability index gets 1.8 greater than 1. In sensitivity analysis shows that the project’s NPV is very sensitive to changes in sales and COGS, and relatively insensitive to changes in either growth rate or rate of return.In a method of capital budgeting analysis, Livia project could be accepted with initial investment for $4,199,288 and still more detailed analysis is required to support the expenditure.

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