Capital budgeting decisions affect the profitability of a business organization. Since these decisions are related to fixed assets, they have direct bearing on earnings since it is fixed assets which earn profits for the enterprise. Besides, these decisions relate to the commitment of large amount of funds for long period of time. Therefore, a wrong decision can have long lasting effect not only on the profits but on very survival of the organization. On the other hand, sound capital budgeting decisions will have a very salutary effect on its wealth creation. This paper presents a study done on a sample of 137 public sector enterprises. Primary as well as secondary data have been used for the purpose. The study covers a period of 13 years from 1991 to 2003.
Journal of Advances in Management Research – Emerald Publishing
Published: Jan 1, 2005
Keywords: Capital budgeting; Financial management; Public sector