Explain the effects that depreciation has on net income and cash flow of a company.

Capital Budgeting

Understanding the most common capital budgeting techniques (i.e. NOV, IRE, Payback Period, etc.) is very important for investors and analysts alike. These methods provide a quantifiable value for various projects and investments.

For this Discussion, consider the various capital budgeting methods. Also, consider which capital method you think to be superior to others and why. Finally, consider the effects that depreciation has on net income and cash flow of a company.

Post by Day 3, a 150- to 200-word explanation of one of the capital budgeting methods (NOV, IRE, etc.) that are used to examine potential investments. Explain some of its advantages and disadvantages. Also, explain which capital budgeting method is superior and why. Finally, explain the effects that depreciation has on net income and cash flow of a company.

Be sure to support your work with specific citations from the Learning Resources and any additional sources.

Read a selection of your colleagues’ postings.

Respond by Day 6 to two or more of your colleagues’ postings in one or more of the following ways:

  • Ask a probing question.
  • Share an insight from having read your colleague’s posting.
  • Offer and support an opinion.
  • Make a suggestion.
  • Expand on your colleague’s posting.

Return to this Discussion in a few days to read the responses to your initial posting. Note what you learned and the insights you gained from the comments your colleagues made.

Note: Refer to the Discussion Template in this week’s Learning Resources for your main post and response.

 

Required Resources

Readings

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