Capital Budgeting Practice Exam

About Capital Budgeting
Capital budgeting is the process a business undertakes to evaluate potential major projects or investments. Construction of a new plant or a big investment in an outside venture are examples of projects that would require capital budgeting before they are approved or rejected.

Capital budgeting is the process of making investment decisions in long term assets. It is the process of deciding whether or not to invest in a particular project as all the investment possibilities may not be rewarding.

As part of capital budgeting, a company might assess a prospective project's lifetime cash inflows and outflows to determine whether the potential returns that would be generated meet a sufficient target benchmark. The capital budgeting process is also known as investment appraisal.

Why is Capital Budgeting important?
Capital budgeting is used by companies to evaluate major projects and investments, such as new plants or equipment. The process involves analyzing a project's cash inflows and outflows to determine whether the expected return meets a set benchmark.

Advantages of Capital Budgeting:
•    Capital budgeting helps a company to understand the various risks involved in an investment opportunity and how these risks affect the returns of the company.
•    It helps the company to estimate which investment option would yield the best possible return.
•    A company can choose a technique/method from various techniques of capital budgeting to estimate whether it is financially beneficial to take on a project or not.
•    It helps the company to make long-term strategic investments.
•    It helps to make an informed decision about an investment taking into consideration all possible options.
•    It helps a company in a competitive market to choose its investments wisely.
•    All the techniques/methods of capital budgeting try to increase shareholders wealth and give the company an edge in the market.
•    Capital budgeting presents whether an investment would increase the company’s value or not.
•    It offers adequate control over expenditure for projects.
•    Also, it allows management to abstain from over investing and under-investing.

Who should take the Capital Budgeting Exam?
•    Costing, Finance and Accounting professionals
•    Business owners
•    Entrepreneurs
•    Anyone who wants to assess their Capital Budgeting skills
•    Costing, Finance and Accounting managers and senior executives
•    Costing, Finance and Accounting consultants
•    Any professional with skills and knowledge on Capital Budgeting
•    Anyone interested in Capital Budgeting
•    Students

Knowledge and Skills required for the Capital Budgeting

Critical thinking and good communication skills helps candidate to gain quick success for career in capital budgeting.

Capital Budgeting Practice Exam Objectives

Capital Budgeting exam focuses on assessing you in concepts and application of financial ratios analysis, accounting statements, capital budgeting and cash flows.

Capital Budgeting Practice Exam Pre-requisite

There are no prerequisites for the Capital Budgeting exam.

Capital Budgeting Certification Course Outline
1. Financial Planning and Budgeting
2. Financial Ratios Analysis
3. Accounting Statements
4. Capital Budgeting Basics
5. Estimating Investment Cash Flows
6. Computing Incremental Cash Flows
7. Evaluating Project Flows

Exam Format and Information
Certification name – Capital Budgeting Certification
Exam duration – 60 minutes
Exam type - Multiple Choice Questions
Eligibility / pre-requisite - None
Exam language - English
Exam format - Online
Passing score - 25
Exam Fees - INR 1199