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Cap Bud - Hero
Cap Bud - Hero
PROJECT REPORT
ON
CAPITAL BUDGETING
AT
HERO MOTOCORP PVT LTD
Submitted
By
A. AMARNATH REDDY
H.T.NO: 1302-18-672-023
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE
OF
Meaning:
Capital budgeting is the process that companies use for decision making on capital
project. The capital project lasts for longer time, usually more than one year. As the
project is usually large and has important impact on the long term success of the
The specific capital budgeting procedures that the manager uses depend on the
manger's level in the organization and the complexities of the organization and the
size of the projects. The typical steps in the capital budgeting process are as follows:
Brainstorming. Investment ideas can come from anywhere, from the top or the bottom
of the organization, from any department or functional area, or from outside the
company. Generating good investment ideas to consider is the most important step in
the process .
Project analysis. This step involves gathering the information to forecast cash flows
Capital budget planning. The company must organize the profitable proposals into a
coordinated whole that fits within the company's overall strategies, and it also must
consider the projects' timing. Some projects that look good when considered in
predicted results, and any differences must be explained. For example, how do the
revenues, expenses, and cash flows realized from an investment compare to the
helps monitor the forecasts and analysis that underlie the capital budgeting process.
helps improve business operations. If sales or costs are out of line, it will focus
monitoring and post-auditing recent capital investments will produce concrete ideas
for future investments. Managers can decide to invest more heavily in profitable areas
business. Planning for capital investments can be very complex, often involving
many persons inside and outside of the company. Information about marketing,
The authority to make capital decisions depends on the size and complexity of the
project. Lower-level managers may have discretion to make decisions that involve
less than a given amount of money, or that do not exceed a given capital budget.
Larger and more complex decisions are reserved for top management, and some are so
significant that the company's board of directors ultimately has the decision-making
margin,
1.2 NEED AND IMPORTANCE:
Whether or not funds should be invested in long term projects such as settings of an
the modern times. It involves decision to commit the firm’s, since they stand the long-
term assets such decision are of considerable importance to the firm since they send to
determine its value and size by influencing its growth, probability and growth.
The scope of the study is limited to collecting the financial data of HERO
MOTOCORP PVT LTD for four years and budgeted figures of each year.
1.4 OBJECTIVES OF THE STUDY
To Asses the long term requirements of funds and plan for application of internal
To offer conclusion derived from the study and give suitable suggestions for the
The study is both descriptive and analytical in nature. It is a blend of primary data and
secondary data.The primary data has been collected personally by approaching the
online share traders who are engaged in share market. Methodology refers to the by
which data is obtained. The information has been collected through various sources
Websites
Journals
Text books
The methodology used for this purpose is Survey and Questionnaire Method. It is a
time consuming and expensive method and requires more administrative planning and
Statistical Tools: MS-excel and pie and bar diagrams are used to analyze the data.
company's best interest. Here are the basics of capital budgeting and how it works.
A company undertakes capital budgeting in order to make the best decisions about
utilizing its limited capital. For example, if you are considering opening a distribution
Article:1
issue 4,2008
ABSTRACT:
This paper is a compressed version of our paper that was first published as “the theory
and practice of corporate finance: evidence from the feild” in the journal of finantial
finantial executives international (fei) but the opinions expressed herein do not
necessarily represent the views of fei .we thank the fei excutives who respond to the
foundation .
\
Article2
Abstract:
This article discusses the relative merits of different capital budgeting techniques used
by MNCs. the purpose is to show that the apv method ,which has recently gained
unless the NPV IS Already determined. The author suggest that complicated cost of
capital adjustments may Be the only route to calculating a project s NPV correctly.
Article3
Authors: EugeneF.fama
Abstract:
This paper is concerned with the valuation of multiperiod cash flows in a world where
prices are Determined according to the sharp-linter –black model of capital market
equilibirium. We find that The current market value of any future net cash flows is the
current expected value of the flow is realized .the discount rates are known as non-
stochastic,but the rates for the different periods preceeding the realization of the cash
flow need to be the Same ,and the rates relavant for a given period can given differ
Authors : Shvetasingh,P.K.jain
Year: 1994
different types of capital budgeting process .the centralised capital budgeting process
Books:
-Financial Management - Prasanna Chandra
-Management Accounting - R.K.Sharma & Shashi K.Gupta
-Management Accounting -S.N.Maheshwary
-Financial Management -Khan and Jain
-Research Methodology -K.R.Kothari
Internet Sites:
http\\:www.google.com
http\\:www.AMBUJA.co.in
http\\:www.googlefinance.com