Title

A STUDY ON CAPITALBUDGETING WITH SPECIAL EMPHASIS ON

KESORAM CEMENTS

Introduction
An efficient allocation of capital is the most important finance function in modern times. It
involves decisions to commit firms funds to long-term assets. Such decisions are tend to
determine the value of company/firm by influencing its growth, profitability & risk.
Investment decisions are generally known as capital budgeting or capital expenditure
decisions. It is clever decisions to invest current in long term assets expecting long-term benefits
firms investment decisions would generally include expansion, acquisition, modernization and
replacement of long-term assets.
OBJECTIVES OF THE STUDY

To study the relevance of capital budgeting in evaluating the project finance

To study the technique of capital budgeting for decision- making.

To understand the practical usage of capital budgeting techniques

To understand the nature of risk and uncertainty

To make suggestion if any for improving the financial position if the company.

Problem Statement
The Project study is undertaken to analyze and understand the Capital Budgeting process in
cement manufacturing sector, which gives mean exposure to practical implication of theory
knowledge.
To know about the companys operation of using various Capital Budgeting techniques.
To know how the company gets funds from various resources.

Literature Review
CAPITAL BUDGETING PROCESS:
Atleast five phases of capital expenditure planning & control can be identified:
Identification ( or Organization ) of investment opportunities.
Development of forecasts of benefits and costs.
Evaluation of the net benefits.
Authorization for progressing and spending capital expenditure.
Control of capital projects.
Traditional Approach
Pay Back Period (PBP)
Accounting Rate Of Return (ARR)

Discounted Cash Flow Techniques

Net Present Value (NPV)
Internal Rate of Return (IRR)
Profitability Index (PI)

METHODOLOGY
To achieve aforesaid objective the following methodology has been adopted. The
information for this report has been collected through the primary and secondary sources.
Primary sources
It is also called as first handed information; the data is collected through the
observation in the organization and interview with officials. By asking question with the
accounts and other persons in the financial department.
Secondary sources
The Project is mainly depending on secondary data have been collect through the
various

Books,

Financial reports of Kesoram cements

Magazines,

Brouchers & websites

DESCRIPTIVE RESEARCH DESIGN

Descriptive research includes surveys and fact-finding enquiries of different kinds. The major
purpose of descriptive research is description of the state of affairs, as it exists at present. In
social science and business research, we quite often use the term expost factor research for
descriptive research studies. The main characteristics of this method are that the researcher has
no control over the variable; he can only report what happened or what is happening. Here the
study is conducted for fact finding on preference of Capital Budgeting Techniques adopted by
the organization.
CONCLUSIVE RESEARCH
After the study, based on the data collection. It has been analyzed and the better conclusion and
suggestion are given to conclude the project study.
References:

Pandey, I.M. (1981), Capital Structure and Cost of Capital, Vikas Publishing House
Pvt. Limited, New Delhi.
Chandra, P. (2001), Fundamentals of Financial Management, (Third Edition), Tata
McGraw Hill Publishing Company Limited, New Delhi.
Goyal, V.K. (1992), Cost of Capital Measurement in Indian Industries, Deep and Deep
Publications, New Delhi. Gujrati,
Khan M.Y. and Jain, P.K. (1992), Financial Management: Text and Problems,
Website :
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www.kesocorp.com
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