Capital Budgeting Decision Model
Originally published: 09/11/2020 08:51
Publication number: ELQ-95613-1
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Capital Budgeting Decision Model

The model is best tool for dynamic decision making

Description
General overview

The capital budgeting model is constructed to evaluate potential major projects or investments that would require capital budgeting before they are approved or rejected, it helps CEO, CFO and entrepreneurs to assess a prospective project’s cash flow to determine whether the potential returns that would be generated meet a sufficient target benchmark

The capital budgeting model allows the user to calculate the net present value (NPV), internal rate of return (IRR), regular payback, discounted payback and profitability index from simple cash flow stream with dynamic investment decision

The model helps the users to avoid failure or going out of business and improve the power for knowing the numbers to make business decision
The template is fully-editable / customizable model
Inputs

Update the general info in the Front Page
Enter the initial investment in the green cells on cell C8 & C9
Enter the discount rate element in the green cells from cell C19 to cell C27
Enter the cash flow in the green cells from cell E13 to cell N13, this model is for maximum 10 years investment

Outcome

Weighted average cost of capital or Discount rate
Regular payback period
Discounted payback period
Net present value NPV
Internal rate of return IRR
Profitability index PI
Investment criteria and decision
Capital budgeting ranking between small firm and big firm
Dashboard with 3 scenario analysis by choosing the selection box showing on top on the chart

Conclusion and customization
This is a highly versatile, very sophisticated financial model template, and is also user-friendly.
If you have any inquiries, modification request or other requests of assistance to customize the model template for your business case please contact us here: https://www.eloquens.com/channel/ecorporatefinance

This Best Practice includes
Excel Template

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Further information

Dynamic investment decision making

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  • Cheryl Adams, MBA(last updated: 18/05/2021 03:29)

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