Capital Budgeting Decision in Manufacturing Company (A Case Study of Vital Foam Nigeria Plc Lagos

TABLE OF CONTENTS

CHAPTER ONE

 

1.1      Background of the study

1.2      Statement of the problem

1.3      Aims and objective of the study

1.4      Research questions

1.5      Research hypothesis statement

1.6      Significant of the study

1.7      Scope and limitation of the study

1.8      Definition of the terms.

1.9      History of vital foam Nigeria plc Lagos

1.10   organisation of  the  study

CHAPTER TWO

2.1      Literature review

2.2      Basic investment appraisal technique

2.3      A review of past studies

2.4      Theoretical framework

2.5      Capital rationing

2.6      Risk and uncertainty

2.7      Capital investment appraisal under uncertainty

2.8      Measure of risk

CHAPTER THREE

Research methodology

3.1      Introduction

3.2      Research design

3.3      Determination of sample size

3.4      Population of the study

3.5      Sampling method

3.6      Data collection method

3.7      Validation of the instrument

3.8      Choice of statistical analysis

3.9      Re-statement of research hypothesis

3.10   Questionnaire design and administration

3.11   Data analysis techniques

3.12   Limitations of the research

CHAPTER FOUR

4.1      Data presentation and Data analysis

4.2      Presentation, analysis  of data

4.3      Test of hypothesis

CHAPTER FIVE

5.0   Summary, conclusion and recommendations

5.1      Summary

5.2      Conclusion

5.3      Recommendations

References

Appendix

CHAPTER ONE

1.1   BACKGROUND OF THE STUDY

        Capital budgeting is the process by which the financial manager decides whether to invest in specific capital projects or assets. In some situation, the process may entail in acquiring assets that are completely new to the firm. Other situations,it may mean replacing on existing absolete asset to maintain efficiency. During the capital budgeting process answers to the following questions are sought.

         What project are good investment opportunities to the firm? from this group which assets are the most desirable to acquire? How much should the firm invest in each of these assets?

COMPONENTS OF CAPITAL BUDGETING

         Initial investment outlay: it includes the cash required to acquire the new equipment or bold the new plant less any net cash proceed from the disposal of the replaced equipment. The initial outlay also includes any additional working capital related to new equipment. Only changes that occurs at the beginning of the project are included as part of the initial investment outlay. Additional working capital needed or no longer needed in a future period is accounted for as a cash outlay or cash in flow during that period. Net cash benefits of savings from the operation. This component is calculated as under: (The incremental change in operating revenue minus the incremental change in the operating cost= Incremental net revenue) minus (taxes) plus or minus (changes in the working capital and other adjustments)