Stages of Capital Budgeting Implementation

Capital budgeting process begins by proposing a new project and then estimate the next project cash flows to determine whether the project is feasible. Afterwards Integration implement viable projects . And the last one is monitoring  projects have been implemented .Below will be described in more detail about the stages of capital budgeting.

 Propose a New Project

This occurs when the divisions or departments offer input in the form of new projects that may be considered by the company .

 Estimating Project Cash Flow

Estimates of cash flows arising from the potential projects is critical of the capital budgeting process . The revenue received from the project showed that incoming cash flow , while the burden of payment to cover the project indicate cash outflow . That's why each potential project is able to influence the company's cash flow .

 Determine whether the project is worth to Run

The next step is appraisal . One well-known method is the net present value technique . Of course that is required of her is one of mutually exclusive or mutually exclusive . That is the situation in which only one of the two projects made ​​with the same goal which is acceptable . There are also other terms , that is an independent project whose purpose it is to project its feasibility can be assessed without considering the other projects .

 Implement Projects Worthy to Run

In this stage of the process or the company needs to focus on the implementation of projects that will be executed . As part of the implementation process , the company must obtain the necessary funds to finance the project .

 Monitor Projects Has Implemented

The projects that have been implemented need to be monitored to determine whether the cash flows have been estimated well . Monitoring can also detect inefficiencies in the project and can help determine when a project should be abandoned .