Introduction

Problem studied…………………………………….. Background information……………………………. Research goals……………………………………...

Preliminary details Literature survey…………………………………… Theoretical framework…………………………….. Hypothesis formulation…………………………….

Research design Type and nature of study…………………………. Sampling technique……………………………….. Data collection methods…………………………..

Results of data analysis Hypothesis substantiated/unsubstantiated…….

Conclusion

Recommendations

Limitations of study

Acknowledgments

References

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TABLE OF CONTENTS

We recently conducted a comprehensive survey that analyzed the current practice of corporate finance, with particular focus on the areas of capital budgeting. The survey results enabled us to identify aspects of corporate practice that are consistent with finance theory, as well as reconcile with what is teach in our business schools today. In presenting these results, we hope that some practitioners will find it worthwhile to observe how other companies operate and perhaps modify their own practices.

The results of our survey were reassuring in some respects and surprising in others. With respect to capital budgeting, most companies follow academic theory and use discounted cash flow (DCF) and net present value (NPV) techniques to evaluate new projects. But when it comes to making capital structure decisions, corporations appear to pay less attention to finance theory and rely instead on practical, informal rules of thumb. In order to remain profitable in a global market raising producers are developing alternative production systems.

The primary aim of these alternative systems is to lower costs, increase revenue and lower the producer’s exposure to risk. Production costs are lowered primarily through a transfer of investment from temporary labor to capital investment in machinery. Revenues generated by these new systems are increased due to increase yields. Finally, exposure to weather and labor availability risk are reduced under these alternatives.

This BASIC Report provides measurement of the firm performance and firm size under different capital budgeting techniques. The firm performance is measured by growth in sales level, tangibility and profitability. This process allowed us to evaluate the amount of time necessary to repay the investment required for each system, to evaluate the net present value of the alternatives, and to calculate two rates of return measures. One rate of return measure allows for reinvestment, while the other precludes reinvestment.

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EXECUTIVE SUMMARY

Since the early l950s, the academic community has tried to convince corporate managers that there are sophisticated techniques that can improve the capital budgeting decision-making process. Over the years, many studies including Klammer (1972), Gitman and Forrester (1977), Kim and Farragher (1981), Bierman (1993), and Farragher, Kleiman and Sahu (1999) have documented a trend toward increasing business use of such sophisticated capital budgeting techniques. However, there is no clear evidence whether better performing companies are more likely to employ sophisticated capital budgeting processes than are lower performing companies.

Illustrations are commonly showing that a firm using a sophisticated technique, such as discounted cash flow, will make better decisions and thus perform better than the firm using less acceptable methods, such as payback. Despite this, previous research has indicated that the spill-over from theory to practice has been slow. However, a recent study by the author indicates that the preferred techniques are increasingly being used. The primary purpose of this study is to determine if a firm's performance and firm size is related to the sophistication of the capital investment procedures and standards it uses.

Attention is directed at the relationship of performance, size and capital budgeting procedures because the future of the firm is dependent largely on the investment decisions of today. A performance measure was chosen and related to questionnaire responses through the use of regression analysis. For this study a restrictive meaning is given to capital budgeting. Attention is directed primarily to those steps that lend themselves to generalization. These include: the various analytical systems used, some factors affecting the rate of return, the availability of funds, long-range plans, search for alternatives, standard forms, and steps that go into the determination of expected cash flows. Cost of capital and its measurement are not specifically under consideration in this study.

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INTRODUCTION

“Which variable firm performance, growth, profitability has more impact on capital budgeting techniques?”Our research area is Finance and in making financing decisions some firms do not use capital budgeting techniques, which ultimately affect their firm performance and size.

Our objective is to study that how the Capital budgeting techniques have influence on firm size and [particularly its performance.

Thomas (1973) argued:

The idea conveyed in this journal is of firm should use sophisticated technique, such as through discounted cash flow better decisions can be

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BODY OF THE REPORT

Capital budgeting techniques and firm performance:

LITERATURE SURVEY

PROBLEM AREA

OBJECTIVE OF RESEARCH

taken and firm performs better than the firm using less acceptable methods, such as payback. A recent study by author indicates that the use of preferred techniques has increased. Here the main focus is on relationship of performance and capital budgeting procedures because firm’s future is dependant of today’s investment decisions .To focus on whether capital budgeting techniques are related to performance, the operating rate of return, as defined in this journal, was adopted. Hypothesis testing shows that the operating rate of return reduces variations from known true rates of return caused by variability of following:

Differences in the application of accounting principles and procedures.

Differences in the method of financing investments. The occurrence of unusual events.

Basic need is to understand that which technique or method should be used for analyzing investment. The use of capital budgeting techniques also depends on size of firm; if firm is bigger and diversified then traditional techniques will not be that much acceptable then firm should approach contingent techniques. If firm is using more them one technique simultaneously than will be placed in category of highest sophistication. Also depends on firms capital intensity, risk of firm and risk of project .Here Capital budgeting techniques are dependent on:

Size of firm Capital intensity Risk of firm Risk of project

Agricultural co-operatives like other businesses, is operating in increasing Competitive environment. And sometimes in aggressive economic environment. So they need to serve effectively to their members if they want to survive in such a competitive market for this they have to reduce cost and follow sophisticated capital budgeting techniques .But unfortunately agricultural sector is unwilling to use sophisticated techniques and wants to follow traditional approaches .The major conclusion of this journal is that agricultural sector isn’t utilizing discounted capital budgeting techniques in their capital investment decision making and in this research correlation found between the utilization of internal rate of return and Net present value. And this indicates a tendency of using multi-method approach and giving also opportunity to become more sophisticated cooperatives

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The adaptation of capital budgeting techniques by agriculture:

teues:

More sophisticated planning and budgeting techniques such as capital budgeting will improve the effectiveness and efficiency of agricultural co-operatives in meeting their members’ marketing and production needs.

So this sector face evils because of capital budgeting decisions, three discounted cash flow techniques can be utilized by agricultural sector:

net present value approach (NPV) internal rate of return approach (IRR) The profitability index (PI)

Aranoff (1992) argued: Capital budgeting is depends upon the technology advancement and demand fluctuations. The writer is saying that as the technology is changing so the firm has to improve by carefully considering the fluctuations in demand and can make better decisions if they use capital budgeting techniques. Its basic aim is to maximize the profits of the company by seeing the after text cash flows of investments. In this the dependent variable is capital budgeting and independent variable is technology and demand fluctuations. Much work in the journal is based upon some economic assumptions. These assumptions are used for capital budgeting analysis in technology and demand fluctuations. Those assumptions are:

1. Durable and specific assets: The durable assets are useful for many years economically. While the specific assets produce only specific type of products. They contribute to long term economic benefit to the manufacturer.2. Demand fluctuations: In demand fluctuations there is quoted- price system and specific and durable assets which lead to idle capacity and is considered as a desirable situation.3. Plant or equipment of each technology has a certain practical capacity, that is, an operating rate that minimizes total costs per unit. A manager can run the plant or equipment beyond its capacity, to a degree, but only by paying an overload or overtime premium. In last of this journal I would suggest that company should use all alternatives of investment, technologies available and after tax discounted cash flows and the manager should start with one technology and do incremental after-tax cash flow analysis to find the level of investment that yields the highest NPV.

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Capital budgeting techniques and technology

Capital budgeting techniques:

Brick and Weaver (1984) argued:

The project investment can be evaluated through 4 different techniques. He told the use of after- tax weighted average cost of capital (ATWACOC) as a discount rate for determining net present value and the before-tax weighted average cost of capital (BTWACOC) should be used to discount cash flows which incorporate the tax deductibility of interest expense. The Equity Residual (ER) approach defines project net cash flow from the stockholders' perspective and values the flows by the cost of equity. ER is equivalent to ATWACOC and BTWACOC if market weights are constant. In this the dependent variable is profitable investment and independent variable is capital budgeting techniques. The basic purpose of this paper is to for capital budgeting techniques. This comparison is done through CAPM approach i-e capital asset pricing model. It is not the accurate method it is simply used for convenience.

The capital budgeting techniques are:

1. After-Tax Weighted Average Cost of Capital (ATWACOC):2. Before-Tax Weighted Average Cost Of Capital (BTWACOC):3. The Equity Residual Method (ER):4. Adjusted Present Value (APV): In this we have compared the four techniques of capital budgeting in profitable investments. The capital budgeting would be accurate depending upon the assumed method of project financing and the time pattern of risk. It is also stated that these four techniques give biased results. ATWACOC has fewer errors.

Meyer (1979) argued:

Mutually exclusive investment proposals like the choice of NPV and IRR for selecting among identical costs has received wide attention in the financial literature it received enormous study more than twenty years relating to capital budgeting. Neither the NPV nor IRR criteria make any assumption about the reinvestment of cash flows the selection of an optimal criterion must be accompanied by explicit reinvestment rate.

The problem in evaluating the appropriate investment rate is:

“If financial capital is freely available at any point in time, the reinvestment rate should be the marginal cost of the alternative funds, i.e., the firm's cost of capital. In such a case, the present value criterion is to be preferred.” In this the independent variable is capital budgeting techniques and the dependent variable is reinvestment rate. The firm always invests to

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Capital budgeting techniques and reinvestment rate:

the point where marginal revenue is equal to marginal cost and that the appropriate reinvestment rate must be the firm's marginal cost of capital.

Klammer (1979) argued:

During the capital budgeting process managers can accept or reject financial analysis for capital expenditure. Financial analysis is classified into two broad categories:

Sophisticated budgeting techniques it includes risk, cash flows, and the time value of money

Simple budgeting techniques it includes present values, incorporate risk

Different firms who employ knowledgeable, advanced and cultured capital budgeting techniques should try to perform well theoretically rather than those firms which use simple and not sophisticated techniques. This question has produced different results. For this purpose different test has been conducted in different firms ,and from these tests it is concluded that it is not necessary that advanced capital budgeting techniques result in shape of better firm performance but it could be possible that during an economic stress faced by company these techniques help them to bring recovery of that firm. In this the dependent variable is firm performance and the independent variables are capital budgeting techniques, environmental uncertainty and reward system. The purpose of this research is to find out the performance of firm due to changing the techniques.Robert & Randolph (1972) argued:

Suggests that for the treatment of the risk in capital budgeting in most of the books at least three general methods exists whish are as follows:

Risk adjusted discount method (RAD) Certainty equivalent method(CE) Single certainty equivalent method(SCE)

Among this risk adjusted discount method and the certainty equivalent method none of them is being adopted as an ideal for the evaluation of the investment proposals. Therefore the third approach has merged which is being called as the single certainty equivalent method. This 3rd method/ approach is based upon the techniques which are first being introduced by HILLIER but this approach also includes many variations.Single Certainty Equivalent Method:Theoretical Deficiency of SCE Method:Practical Deficiencies of SCE Method:Issues are that the errors made by the SCE method on the capital budgeting proposal is quiet large.

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Capital budgeting techniques and firms expenditure:

The major purpose of this SEC method is to assess the probability distribution of the specific project in the capital budgeting techniques. Its major fault is that it misstates the value of typical cash flow related to the previous one due to which the market discount rates becomes higher for that specific project than the riskiness of the specific project. The error is inherited in this method and cannot be removed therefore it creates a quiet large problem. Therefore RAD and CE methods are being given preference over SCE method because they both don’t possess this deficiency therefore they can be used quiet easily as compare to the SCE method.

Weaver, Cason & Daleiden (1989) argued:

The three of them gave presentations about the capital budgeting process. In which they proposed various things he works in a company named DuPont which ranks ninth among the 500 companies which makes commodities. Their principle methodology currently is IRR. Their capital is estimated periodically by a variety of methods, all of which lead to about the same answer. Many years ago, appropriation requests tended to be thought of almost in isolation.So, business plans will be drawn up to look ahead one, two, five, and ten years into the future for each major business segment, and this plan may or may not involve major capital investment. If it does, the capital investment will be studied and preliminary numbers will be drawn up of the type learned about in a beginning finance class, and then the process will move forward.

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INDEPENDANT VARIABLES

Panel discussion/Capital budgeting:

THEORATICAL FRAMEWORK

CAPITAL BUDGETING:

This study is an attempt to measure the relationship between capital budgeting sophistication and business performance.

“Capital budgeting (or investment appraisal) is the planning process used to determine whether a firm's long term investments such as new machinery, replacement machinery, new plants, new products, and research development projects are worth pursuing”.

According to investopedia

“The process in which a business determines whether projects such as building a new plant or investing in a long-term venture are worth pursuing. Oftentimes, a prospective project's lifetime cash inflows and outflows are assessed in order to determine whether the returns generated meet a sufficient target benchmark. It’s the process for determining the profitability of a capital investment”.

Following capital budgeting techniques will be used in evaluating investment:

Discounted Payback period (DPP)

Net present value (NPV)

Internal rate of return (IRR)

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SOPISTICATED CAPITAL BUDGETING TECHNIQES:

Modified internal rate of return (MIRR)

“Length of time required to recover the initial cash outflow from the discounted future cash inflows. This is the approach where the present values of cash inflows are cumulated until they equal the initial investment”.

Previous findings:

Bhandari, Shyam B. argued that among all of the capital budgeting techniques NPV ensures profitability but not liquidity, but PP ensures liquidity not profitability, but DPP ensures both criterions. A project’s useful life is exposed to risk due to changes in political, technological, regulatory factors and change in consumer taste. In such scenario the use of the NPV, the IRR, the PI (which all assume a fixed life) as decision making criterion become less desirable than the DPP.

“Present value of an investment's future net cash flows minus the initial investment. If positive, the investment should be made (unless an even better investment exists), otherwise it should not”.

"The IRR for an investment is the discount rate for which the total present value of future cash flows equals the cost of the investment. It is the interest rate that produces a 0 NPV”.

Previous findings of NPV and IRR:

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Discounted payback

Net present value

Internal rate of return

Ray Martin after conducting the research on capital budgeting techniques has concluded his finding that has shown the utility of internal rate of return and net present value. According to him, practically speaking and properly viewed, IRR yields the same decision as does NPV except under some extreme circumstances that present few limitations in practice. When IRR is incalculable, NPV is suspect. No attempt has been made to suggest that IRR is superior to NPV. They are best used together. NPV and IRR give consistent answers if handled and viewed properly. Together they give an indication of risk as well as return. IRR is not affected by the size of the cash flows. Finally, IRR is useful alone in virtually all time-value of-money problems.

.

“The rate of return which equates the initial investment with a projects terminal value, where the terminal value is the future value of the cash inflows compounded at the required rate of return”.This better reflects the profitability of a project, as standard IRR assumes the cash generated from the project is reinvested at the IRR, whereas MIRR assumes that cash is reinvested at the firms cost of capital.

Previous findings:

Cary and Dunn argued While rates of return methods, in general, and the Internal Rate of Return (IRR) method in particular, have been found to be privileged by a majority of researchers (Gitman & Forrester, 1997), it has also been shown that the IRR method can lead to erroneous rankings of mutually exclusive projects when compared to the Net Present Value (NPV) method of capital budgeting (Fisher, 1930). The differences in rankings may be caused by the implied reinvestment rate assumption of the IRR method (Fisher, 1930), or by differences in the size of the projects, the scale problem, or in the life of the projects, the time span problem. Differences in the risk classes of the projects and capital rationing can also cause ranking differences. This paper will assume that all projects are in the same risk class as the firm and that capital rationing does not exist. The Modified Internal Rate of Return (MIRR) method of capital budgeting, or similarly the Financial Management Rate of Return method (Findlay & Messner, 1973), was developed to overcome the problem of the implied reinvestment rate assumption (Bierman & Smidt, 1984, Hirshleifer, 1970, Solomon, 1956).

However, when scale or time span differences exist, the MIRR method may still give rankings of mutually exclusive projects that are different than NPV (Brigham & Gapenski, 1988). This paper presents an adjustment to the MIRR method that will give rankings that are consistent with NPV for scale

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Modified internal rate of return

differences and for non-repeatable projects, for time span differences. In addition, a simplified method of calculating MIRR is developed.

“Firm performance comprises the actual output or results of an organization as measured against its intended outputs (or goals and objectives).”

According to BNET business dictionary

“A method of categorizing companies according to size for the purposes of government statistics. Divisions are typically micro business, small business, medium-sized business, and large-sized business”

Previous findings:

Klammer (1973) concluded that the mere adoption of various analytical tools for capital budgeting was not sufficient to bring about superior operating performance. In contrast, Kim [1975, 1982] found that firms which used more sophisticated methods for selecting capital projects tended to have higher operating rates of return and higher earnings per share. There are several other factors which may vitiate the improvement of firm performance after a switch from inexperienced to sophisticated capital budgeting selection techniques. These factors may have affected the analyses and as such represent limitations to our work.

Over the years, many studies have documented a trend toward increasing business use of such sophisticated capital budgeting techniques. However, there is no clear evidence whether better performing companies are more likely to employ sophisticated capital budgeting processes than are lower performing companies.

Since the early 1950s, the academic community has tried to convince business that there are sophisticated techniques that can improve the capital budgeting decision-making process. Over the years, many studies including Klammer (1972), Gitman and Forrester (1977), Kim and Farragher (1981),

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DEPENDANT VARIABLES

Firm’s performance:

Firm’s size:

Bierman (1993), and Farragher, Kleiman and Sahu (1999) have documented a trend toward increasing corporate use of such sophisticated capital budgeting techniques.

Performance is measured by an operating rate of return measure similar to what is used by Klammer. After controlling for company size, operating and financial risks, Kim and Farragher find a significant positive relationship between the degree of capital budgeting sophistication and performance better performing companies are more likely to employ sophisticated capital budgeting processes than are poorer performing companies. The Kim and Farragher study is incomplete for two reasons. First, their capital budgeting sophistication metric is not fully comprehensive. It does not include whether or not a company's capital budgeting process incorporates strategic analysis, company-wide return/risk goals, and cash flow forecasting. And second, the explanatory variables in their regression equation are not industry-adjusted.

Pike (1984) analyzes the relationship between capital budgeting sophistication and performance for large, United Kingdom corporations. Like Kim and Farragher, he employs a single capital budgeting sophistication metric. The metric incorporates twelve procedural activities (planning, administration, and control) and sixteen quantitative techniques (evaluation measures, risk analysis processes, and management science techniques). After adjusting for company size, capital intensity, operating risk, and industry, Pike finds a significant negative relationship between capital budgeting sophistication and performance.

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DIAGRAM

Firm’s performance

Firms Size

Net present value

Discounted payback

Internal rate of returnModified internal rate of return

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HYPOTHESIS

Null hypothesis:

There is no relationship between sophisticated capital budgeting techniques and firm’s size and performance. These techniques can’t improve the performance of firm.

The use of sophisticated capital budgeting techniques was not found to be closely related to performance but still there is a significant relationship between firm performance and techniques and direction is clear it can be positive or negative according to different authors. So here hypothesis is non directional.

PURPOSE OF STUDY:

This study is hypothesis testing because we have both independent and dependent variables in this study and study which has both dependent and independent variables is known as hypothesis testing.

NATURE OF STUDY:

As our purpose of study is hypothesis testing so our nature of study will be quantitative because any study whose purpose of study is hypothesis testing its nature of study is quantitative.

TYPE OF VARIABLE: The type of variables is independent and dependent variables. Firm size and firm performance are dependent variables while capital budgeting techniques are independent variable.

NATURE OF EACH VARIABLE: firm performance and firm size are categorical in nature because a firm performance can be good bad or average and firm size can be small or large while capital budgeting techniques are quantitative in nature because these can be used for calculating firm performance and other things.

TYPE OF INVESTIGATION: The type of investigation is measure of association and in that it is correlation because we have multiple independency and 2 dependent variables.

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Alternate hypothesis:

RESEARCH DESIGN

STATISTICAL TECHNIQUE: The statistical technique being used in this study is multiple regressions because when we have correlation study the sampling technique which is used is multiple regressions.

TIME HORIZON: Time horizon is longitudinal because we are not collecting data at one point of time so our study would be longitudinal.

UNIT OF ANALYSIS: our unit of analysis is organization because we are measuring the influence of capital budgeting techniques on firm performance and firm size.

TANGIBILITY

Correlations

2. Fixed assets after deducting

accumulated depreciation

4. Total assets

(B4+C2)2. Fixed assets after deducting accumulated depreciation

Pearson Correlation

1 .960(**)

Sig. (2-tailed) .000N 3399 3399

4. Total assets (B4+C2)

Pearson Correlation

.960(**) 1

Sig. (2-tailed) .000N 3399 3407

Model Summary

Model R

R Square

Adjusted R Square

Std. Error of the

Estimate

Change StatisticsR

Square F

Change df1 df2Sig. F

Change

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RESULTS OF DATA ANALYSIS

Change1

.960(a) .922 .922 1850.7085 .92240344.5

661 3397 .000

Coefficients

Model

Unstandardized Coefficients

Standardized Coefficients

t Sig.B Std. Error Beta1 (Constant) 2275.215 246.883 9.216 .000

3. Gross profit

2.997 .087 .515 34.516 .000

PROFITABILILTY

Correlations

7. Net profit

before tax (D5-D6)

4. Total assets

(B4+C2)7. Net profit before tax (D5-D6)

Pearson Correlation

1 .578(**)

Sig. (2-tailed) .000N 3397 3397

4. Total assets (B4+C2)

Pearson Correlation

.578(**) 1

Sig. (2-tailed) .000N 3397 3407

Coefficients

Model

Unstandardized Coefficients

Standardized Coefficients

t Sig.B Std. Error Beta1 (Constant) 2275.215 246.883 9.216 .000

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3. Gross profit

2.997 .087 .515 34.516 .000

Model Summary

Model R

R Square

Adjusted R Square

Std. Error of the

Estimate

Change StatisticsR

Square Change

F Change df1 df2

Sig. F Change

1.960(a) .922 .922 1850.7085 .922

40344.566

1 3397 .000

GROWTH

Correlations

3. Gross

profit1. Gross

sales3. Gross profit Pearson

Correlation1 .515(**)

Sig. (2-tailed) .000N 3329 3303

1. Gross sales Pearson Correlation

.515(**) 1

Sig. (2-tailed) .000N 3303 3307

Coefficients

Model

Unstandardized Coefficients

Standardized Coefficients

t Sig.B Std. Error Beta1 (Constant) 2275.215 246.883 9.216 .000

3. Gross profit 2.997 .087 .515 34.516 .000

Model Summary

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Model R

R Square

Adjusted R

Square

Std. Error of the

Estimate

Change StatisticsR

Square Change

F Change df1 df2

Sig. F Change

1.578(a) .334 .334 1610.4182 .334

1703.108

1 3395 .000

We are measuring the firm performance by growth in sales, profitability and tangibility. The table of correlation shows the results of data analysis that the firm performance has a strong correlation with growth, tangibility and profitability and is highly significant in nature. As the profitability and growth of firm will increase the firm performance will increase. The tangibility and firm performance are strongly correlated with eachother and are also highly significant in nature. While the profitability and growth are also strongly correlated with firm performance and are highly significant in nature. The table of coefficients helps us to see which among the 3 variables most influence the firm performance we look at column Beta under standardized coefficients we see that the beta is .515 for growth which is significant at the .000 level and the positive beta shows that the firm performance can be increased by increasing the growth of the firm. The table of model summary in which the R square (.334) which is the explained variance, is actually the square of multiple R (.578)2 in growth table.

Despite a growing adoption of sophisticated capital budgeting methods, the regression results did not show a consistent significant association between

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CONCLUSION

performance and capital budgeting techniques. This indicates that the mere adoption of various analytical tools is not sufficient to bring about superior performance. The use of sophisticated capital budgeting techniques was not found to be closely related to performance, this finding should not be interpreted to mean that the sophisticated techniques are not preferable. These techniques can help in decision making but no one has proved it

Time for conducting research was very less and we were not able to study the factors in depth.

Missing values are excluded from the analysis and this makes the sample size for some of the time periods smaller than others. Therefore it is possible that some values show up to be significant in some time periods but not in others due to the sample size.

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ACKNOWLEDGEMENT

LIMITATIONS

Great is ALLAH and great is HIS mercy. Who taught by the pen, taught men what he knew not. It is through his boundless grace and infinite mercy that we have been able to bring out this.

Special praise is for our beloved HOLY PROPHET (S.A.W) whose inspiration is for all who seek knowledge and is symbol of knowledge and guidance for humanity as a whole.

We do not have words to express deep gratitude and thanks to our respective supervisor Ms. HAMEEDA AKHTAR who helped and encouraged us in every possible way and took personal interest to help complete this in time. No matter how many times we went to bother her with our problems, she never seemed irritated. In return, all we can do is to offer our greatest respect and honor for a great teacher.

We are also profoundly grateful and we also extend our sincere appreciation to all our class fellows. Words are lacking to express obligations to our affectionate parents, their love, good wishes, inspirations and unceasing prayers without which the present destination would have been merely a dream.

All our prayers and gratitude’s for them who prayed, helped and encouraged us to achieve our goal.

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REFERENCES:

1. Bierman, H., (1992). Capital budgeting analysis. Journal of Financial Management, 57(4), 21- 24.

2. Capon, N., Farley, J. & Hoenig S., (1990). Determination of financial performance. Journal of Management Science, 21 (5), 1143-1159.

3. Denis, D.J., &. Denis, D.K., (1984). Agency problems, equity ownership, and corporate diversification. Journal of Finance, 5(2), 91-97.

4. Thomas, K. (1973).Capital budgeting techniques and firm performance. Journal of the Accounting Review, 48 (2), 353-364.

5. John, B., Morgan, P., & Linda S. (1997). The adoption of capital budgeting techniques by agricultural. Journal of Business and Economics, 99 (4), 128–132.

6. Aranoff, G., (1992). Capital budgeting with technology choice and demand fluctuations in a simple manufacturing sample. Journal of Managerial and Decision Economics, 13 (5), 409-420.

7. Brick, I., & Weaver, D. (1984). A comparison of capital budgeting techniques in identifying profitable investments. Journal of Financial Management, 13 (4), 29-39.

8. Meyer, R., (1979). A note on capital budgeting techniques and reinvestment rate. Journal of Finance, 34 (5), 1251-1254.

9. Klammer, T., (1972). Empirical evidence of the adoption of sophisticated capital budgeting techniques. Journal of Business, 45 (3), 387-397.

10.Robert, H., & Randolph, W. (1972). A problem in probability distribution techniques for capital budgeting. The Journal of Finance, 27 (3), 703-709.

11.Weaver, S., Cason, R., &Daleiden, J., (1989). Panel discussion/capital budgeting. Journal of Financial Management, 18 (1), 10-17.

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