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| Article Name : | | | A STUDY ON CAPITAL BUDGETING PRACTICES IN LISTED COMPANIES OF BOMBAY STOCK EXCHANGE | | Author Name : | | | RAKESH H M | | Publisher : | | | Ashok Yakkaldevi | | Article Series No. : | | | ISRJ-101 | | Article URL : | |  | Author Profile | | Abstract : | | | Capital budgeting is the important factor in the process of corporate decision-making. The Data's from previous literature shows that managers prefer the payback period method (non-discounted payback model) over the net present value method (discounted cash flow model), which is considered as superior. Almost all investigative research in India has shown that the managers of Indian firms tend to prefer a non-discounted cash flow model, such as a simple payback period method. There is a gap between business practice and academic theory has long been a puzzle to the academic community.
From December 2012 to March 2013, the survey was conducted by using a questionnaire sent to 5,163 people in charge of capital budgeting at firms listed on the Bombay Stock Exchange by focusing on capital budgeting practices. This paper presents the results of the questionnaire survey and evaluates the capital budgeting practices in Indian firms. The results show that Indian firms manage their decision-making by a combination of payback period method and net present value method while most financial managers utilize multiple tools in the capital budgeting process; these results reflect that there is an alignment of views between academia and business. | | Keywords : | | - capital budgeting
- business practice
- academic theory
- indian firms
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