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Capital Investment Appraisal

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Review of Management Accounting Research

Abstract

Capital budgeting or investment appraisal is concerned with organizational management decisions about which projects or assets to invest in and how to finance them to achieve corporate goals. The background to this area of management accounting started by defining this as a routine part of the budgetary control system, hence the label ‘capital budgeting’ still used in many texts and organizations today. Investment appraisal techniques traditionally applied the principles of economics to asset replacement and expansion decisions, largely ignoring the wider context of strategy formulation and implementation; thus, non— financial factors and risk levels were not always fully appraised. Whilst this may have suited the relatively stable manufacturing environments of the post—war Anglo—American countries, it has become far less suitable in recent times and other international contexts.

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Authors
  1. Elaine Pamela Harris
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  2. Moataz El-Massri
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Editors and Affiliations

  1. University of Bedfordshire, UK

    Magdy G. Abdel-Kader

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© 2011 Elaine Pamela Harris and Moataz El-Massri

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Harris, E.P., El-Massri, M. (2011). Capital Investment Appraisal. In: Abdel-Kader, M.G. (eds) Review of Management Accounting Research. Palgrave Macmillan, London. https://doi.org/10.1057/9780230353275_14

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