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6 May, 2015 - 17:10

Capital investment analysis or capital budgeting is used by management to plan, evaluate, and control long-term investment decisions. Capital investment decisions commonly affect operations for a number of years and require a long-term commitment of funds. Capital investment decisions are usually based on either

  1. payback period,
  2. average rate of return,
  3. net present value, or
  4. internal rate of return.