ABSTRACT
Capital investment decisions are that decision that involves current
outlays in return for a stream of benefits in future years. The
distinguishing future between short-term decision and capital
investment (long-term) decision is time.
The objective of this study is
the applications of capital budgeting patterns to enable the
management of companies make credible investment decisions in
areas like: Determining which specific investment projects the firm
should accept. Determining the total amount of capital expenditure that
the firm should undertake and determining how this portfolio of projects
should be financed. As for the methodology, questionnaires were
distributed to eight (8) companies in Port Harcourt. A total of 10
questions were proposed in the questionnaire to enable us carry out the
study. The findings are as follows: That capital expenditure decisions
made by companies have greater impact on their long-term operations
and survival. That company employs professional financial manager to
manage their capital investment activities. That companies employ
appraisal techniques in making capital budgeting decisions, particularly,
the net present value technique, and, That management of companies
is responsible for all capital expenditure decisions and also authorizes
such expenditure. Recommendation of computerization, application of
DCF, adequate planning and control of capital budgeting decisions and
training. My suggestion is that if all the recommendations will be
adapted, it will enhance good decision making on capital budgeting.
