Capital Concepts Business & Marketing Essay Research (Essay Sample)

Capital Concepts Discussion Post
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Capital Concepts Discussion Post
Capital Budgeting
It refers to the process of deciding the projects to pursue at the expense of others. A business always has countless projects it wants to pursue but cannot pursue all at the same time, and a decision has to be made based on expected project returns.
A good example is a large construction firm intending to expand its operations. It plans to purchase equipment worth $10,000. This investment will generate $4,000 as annual returns and will take 2 ½ years to repay. The expected inflation rise is 30% annually implying that the estimated return value will be worth $10,769 instead of $14,000 due to inflation (Mullin, 2019). The real value what will be generated by the investment is $769 annually.
Capital Structure