The Extent of Using and Trusting Capital Budgeting Methods in Projects Appraisal in Palestinian Corporations

Ahmad N. H. Anabtawi

Abstract


This research paper aims to find the degree of the use as well as the trust of the Net Present Value (NPV), Payback Period (PBP), Internal Rate of Returns (IRR) and Accounting Rate of Returns (ARR) as a key capital budgeting method. The research conducted on the listed corporations in Palestine which are 48 company. A questionnaire distributed on 77 financial and project/operations managers in these corporations with 67 responds.

The result shows that both discounted and non-discounted cash flows methods are used and trusted by Palestine public corporations. However, on the other hand, the above four methods are volatile in term of use and trust. The most used and trusted capital budgeting method is the Payback period (PBP). This followed by the Net Present Value (NPV). Accounting Rate of Retunes (ARR) becomes third. Thus the least used and trusted method is the Internal Rate of Returns (IRR). 


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DOI: https://doi.org/10.5539/mas.v12n6p151

Copyright (c) 2018 Ahmad Nasereddin Anabtawi

License URL: http://creativecommons.org/licenses/by/4.0

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