Basics of Capital Budgeting and Investing Decision Making

Investment is a vital term. You may have various options to invest your money or Capital. But if you don’t analyze your alternatives before going to invest, you can incur loss. So, in investment process, you need to follow the steps like-

Identifying the alternatives
Evaluating all the alternatives and
Then critically taking the decision. Here in these steps, 2nd one is very important. If you can analyze or evaluate the exact return on each project, then it becomes easier for you to decide about investment or budgeting the capital. Here a lot of issues are associated with like you may get some money after ten years or fifteen years. So here you need to convert this money into present value at discount rate so that you can decide properly. If you don’t consider the time value of money then you may incur loss again. Because you will see a lot of inflow from your investment but in longer time period. So, here time value of money is a vital factor. I am going to talk on details about these issues of Capital Budgeting evaluation techniques with examples of real life and cryptocurrency. Hopefully you will be benefited from this learning as it will help you in making proper decision in capital budgeting or choosing the best project for your capital. I shall come up with one after one tutorial in this topic. Today is the first part here I have explained some basic issues like what is capital budgeting, Features of capital budgeting, what are the steps of decision making, techniques used in evaluation of capital budgeting.

Hope you will enjoy this video and will have some good idea on this topic.

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Vlog (11) : How to choose best project for Investment (Part 1) : Basics of Capital Budgeting and Investment Decision making