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Capital Budgeting Techniques for a Utility Company

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What two capital budgeting techniques should a Finance Manager of a utility company consider to use for some upcoming projects and how can the company benefit from them?

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The Solution identifies capital budgeting techniques that a utility company could use in the finance department.

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Capital budgeting techniques for utility companies

The process consists of analysing a project's cash outflows and inflows to determine if the expected return meets the expectations. The important methods of capital budgeting include payback, discounted cash flow and throughput analyses.

Capital budgeting is the process a business undertakes to estimate potential important projects or investments. As part of capital budgeting, a company could assess a prospective project's lifetime cash outflows and inflows to determine whether the possible returns that would be generated meet a sufficient target benchmark. The ...

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