Comparison of capital budgeting methods: NPV, IRR, PAYBACK PERIOD

Abstract

In the era of globalization, every company is required to have high competitive ability because the competition that must be faced by companies will be increasingly stringent. In this study discusses whether or not the investment that will be made by the company is feasible. Calculation of the feasibility of this investment using the Capital Budgeting method. Based on the application of Capital Budgeting, methods that are generally used to analyze an investment project include Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period (PP). Capital budgeting analysis is very helpful for companies in conducting research and analysis regarding the feasibility of an investment project planned by the company.