What is Capital Investment, what are the benefits of Capital Budgeting? How do you see its...
What is Capital Investment, what are the benefits of Capital Budgeting? How do you see its implications in Hospitality Industry?
Homework Answers
Ans. : Capital investment :
* It means acquisition of long term assets such as land, building, manufacturing plants and machinery etc.
Benefits of Capital Budgeting are as follows :
* It helps the company to understand various risks involved in investing and estimates that how these risk will impact the returns of company.
* It helps the company to estimate that which investment decision will give more returns.
* It helps the company to make long term strategic investment.
* Adequate control over expenditure for projects.
Implications in Hospitality Industry :
* Helpful in strategic planning and financial control.
* Budget can be prepared based on occupancy rate.
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