Capital Budgeting and Risk Analysis
Looking at capital budgeting and risk analysis. Perception is everything as many people will view this question in different concepts. Why is capital budgeting important?
NPV and Payback Period have been most important. This is because knowing the present value makes a difference as a dollar today is worth more than a dollar tomorrow. Many tend to invest when small business owners are trying to get their business off the ground. Payback period is essential as the longer you go without getting paid the more risk you are taking as you are most likely not going to get paid if the time frame is too long. Not to mention the longer you take to get paid the more money you are actually losing. I am curious to know how many of you are investors? How much of a risk taker are you? For those that do not invest or that are not really risk takers there are apps that will help you that I can recommend.
Here is a visual of the techniques.
Since the pandemic, companies were forced to change the way they think and handle their finances. what do you think of the article interesting as well.