Financial Criteria, Capital Budgeting Techniques, And Risk Analysis Of Manufacturing Firms

Abstract

This study examines the impact that capital budgeting considerations has on the average values of various performance measures for a sample of 118 U.S. manufacturing firms. This study also examines whether the variance of performance measures are affected by differing capital budgeting considerations. Results are analyzed with non-paramentric tests for mean and variance differences. The results of this study provide mixed support for conventional financial theory and a sound basis for further investigation into current capital budgeting practices.