Solve Required (a) only
THE EVOLUTION OF THE APPLICATION OF CAPITAL BUDGETING TECHNIQUES IN ENTERPRISES In today's business environment making sound capital budgeting decisions is a critical factor for survival and success (Bukvic, 2016; Hayward, Caldwell, Steen, Gow, \& Liesch, 2017). Due to the competitive nature of business, companies increasingly find themselves faced with many (and sometimes competing) capital investment choices. Making optimal choices is essential for businesses to remain competitive. To this end, firms often use capital budgeting techniques (CBTs) to objectively identify which investment projects are worth pursuing (Cooper, Morgan, Redman, \& Smith, 200 1; Correia, 2012; Neelakantam, 2015) Although there are numerous CBTs, these techniques can be divided into three categories, namely non -DCF (non -discounted cash flow), DCF (discounted cash flow) and alternative methods. What distinguishes the three CBT categories is the extent to which each conforms to two concepts: the time value of money and business uncertainty. Non DCF methods do not include either of these two concepts, and DCF methods only incorporate the time value of money concept, whereas alternative methods incorporate both the time value of money and business uncertainty concept s. It is therefore evident that there has been a steady theoretical development in CBTs, but it remains unclear whether there are any emerging trends in the application of these methods by firms in practice. It is also not yet evident whether the capital budgeting processes of firms in developing and developed countries are similar or different and whether practices are gradually converging. Source: Siziba, S., \& Hall, J. H. (2021). The evolution of the application of capital budgeting techniques in enterprises. Global Finance Journal, 47. https://doi.org/10.1016/j.gfj.2019.100504. REQUIRED: a) Explain the emerging trends in the use of Capital Budgeting Techniques (CBTs). b) Explain the Capital budgeting practices in both developed and developing countries. Note: Based on the review approach, draw conclusions and recommendations both on current and anticipated future trends of capital budgeting practices in both developed and developing countries. THE EVOLUTION OF THE APPLICATION OF CAPITAL BUDGETING TECHNIQUES IN ENTERPRISES In today's business environment making sound capital budgeting decisions is a critical factor for survival and success (Bukvic, 2016; Hayward, Caldwell, Steen, Gow, \& Liesch, 2017). Due to the competitive nature of business, companies increasingly find themselves faced with many (and sometimes competing) capital investment choices. Making optimal choices is essential for businesses to remain competitive. To this end, firms often use capital budgeting techniques (CBTs) to objectively identify which investment projects are worth pursuing (Cooper, Morgan, Redman, \& Smith, 200 1; Correia, 2012; Neelakantam, 2015) Although there are numerous CBTs, these techniques can be divided into three categories, namely non -DCF (non -discounted cash flow), DCF (discounted cash flow) and alternative methods. What distinguishes the three CBT categories is the extent to which each conforms to two concepts: the time value of money and business uncertainty. Non DCF methods do not include either of these two concepts, and DCF methods only incorporate the time value of money concept, whereas alternative methods incorporate both the time value of money and business uncertainty concept s. It is therefore evident that there has been a steady theoretical development in CBTs, but it remains unclear whether there are any emerging trends in the application of these methods by firms in practice. It is also not yet evident whether the capital budgeting processes of firms in developing and developed countries are similar or different and whether practices are gradually converging. Source: Siziba, S., \& Hall, J. H. (2021). The evolution of the application of capital budgeting techniques in enterprises. Global Finance Journal, 47. https://doi.org/10.1016/j.gfj.2019.100504. REQUIRED: a) Explain the emerging trends in the use of Capital Budgeting Techniques (CBTs). b) Explain the Capital budgeting practices in both developed and developing countries. Note: Based on the review approach, draw conclusions and recommendations both on current and anticipated future trends of capital budgeting practices in both developed and developing countries
