The Use of Capital Budgeting Techniques as a Tool for Management Decisions: Evidence from Jordan

  • Mohammad Ebrahim Nawaiseh
  • Hala Al-nawaiseh
  • Moh’d Attar
  • Azeez Al-nidawy
Conference paper
Part of the Lecture Notes in Mechanical Engineering book series (LNME)


The authors explored the use of capital budgeting techniques (CBTs) by industrial companies listed on the Amman Stock Exchange (ASE) in 2016. Population of the study included (50) public shareholding industrial companies out of all (63) industrial companies registered in 2016. The final response rate of the respondents that are subject to analysis is (42) which constitutes (79.4%) out of the population, and (84%) out of the sample size. Statistical methods such as one sample t test, correlation, and regression analysis were used. The study concludes that CBT were not all equally used; companies adopted a combination of NPV, PI, PBP, ARR and IRR to manage their investment decision- making. The obstacles of the application have scored a combined average of (62. 6%). At the same time, our research shows that most frequently adopted techniques are discounted cash flows based techniques which have equal practice among group of companies. The study recommends that Companies should handle with strict care CBT, because of its impact on future of the company. These methods should be supported and given more attention. Future research may focus on the merit is to explore the effect of capital budgeting methods on performance.


Capital budgeting techniques Management decisions Jordan 


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Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  • Mohammad Ebrahim Nawaiseh
    • 1
  • Hala Al-nawaiseh
    • 2
  • Moh’d Attar
    • 1
  • Azeez Al-nidawy
    • 1
  1. 1.Department of AccountingAl-Zaytoonah University of JordanAmmanJordan
  2. 2.Al-Quds CollegeAmmanJordan

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