{"id":760,"date":"2018-04-19T22:56:39","date_gmt":"2018-04-19T22:56:39","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/?post_type=chapter&#038;p=760"},"modified":"2024-04-29T17:39:35","modified_gmt":"2024-04-29T17:39:35","slug":"introduction-to-methods-for-making-decisions","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/chapter\/introduction-to-methods-for-making-decisions\/","title":{"raw":"Introduction to Budget Methods for Making Decisions","rendered":"Introduction to Budget Methods for Making Decisions"},"content":{"raw":"<h2>What you'll learn to do:\u00a0Differentiate between the different capital budget methods<\/h2>\r\n<img class=\"alignright wp-image-1652\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/2985\/2018\/04\/17180739\/finance-2837085_1920-300x300.png\" alt=\"A person working with graphs and using a calculator.\" width=\"250\" height=\"250\" \/>\r\n\r\nThere are several methods to determine capital budgeting decisions. \u00a0The payback method, internal rate of return, net present value and simple rate of return will be discussed. Most methods will use cash flow to determine which capital budgeting decisions to make.\r\n\r\nPurchase price and how much we can expect to cash flow each year from various options will be needed to do analysis on these decisions. Let\u2019s take a look at these methods in detail.","rendered":"<h2>What you&#8217;ll learn to do:\u00a0Differentiate between the different capital budget methods<\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-1652\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/2985\/2018\/04\/17180739\/finance-2837085_1920-300x300.png\" alt=\"A person working with graphs and using a calculator.\" width=\"250\" height=\"250\" \/><\/p>\n<p>There are several methods to determine capital budgeting decisions. \u00a0The payback method, internal rate of return, net present value and simple rate of return will be discussed. Most methods will use cash flow to determine which capital budgeting decisions to make.<\/p>\n<p>Purchase price and how much we can expect to cash flow each year from various options will be needed to do analysis on these decisions. Let\u2019s take a look at these methods in detail.<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-760\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Introduction to Budget Methods for Making Decisions. <strong>Authored by<\/strong>: Freedom Learning Group. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>budget-finance. <strong>Authored by<\/strong>: mohamed_hassan. <strong>Provided by<\/strong>: Pixabay. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/pixabay.com\/en\/finance-accountancy-savings-tax-2837085\/\">https:\/\/pixabay.com\/en\/finance-accountancy-savings-tax-2837085\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/cc0\">CC0: No Rights Reserved<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":62559,"menu_order":6,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Introduction to Budget Methods for Making Decisions\",\"author\":\"Freedom Learning Group\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"budget-finance\",\"author\":\"mohamed_hassan\",\"organization\":\"Pixabay\",\"url\":\"https:\/\/pixabay.com\/en\/finance-accountancy-savings-tax-2837085\/\",\"project\":\"\",\"license\":\"cc0\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"306102d8-8943-4c52-867a-7d1f747fbe78","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-760","chapter","type-chapter","status-publish","hentry"],"part":114,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters\/760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/users\/62559"}],"version-history":[{"count":11,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters\/760\/revisions"}],"predecessor-version":[{"id":4183,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters\/760\/revisions\/4183"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/parts\/114"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters\/760\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/media?parent=760"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapter-type?post=760"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/contributor?post=760"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/license?post=760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}