Study on Capital Budgeting for Romanian Companies

Author:Dragoş BARBĂLATĂ, Ph. D. Student; Adela PLEŞEA, Ph. D. Student; Ligia IVAZ, Ph. D. Student

JEL:G31, G32

DOI:

Keywords:analysis, capital budgeting, indicators, added value, study

Abstract:
This article aims to present the way CFOs from Romanian companies practice capital budgeting, from the perspective of the indicators used in taking or declining an investment proposal.\r\nThe study shows that at least from the indicators used in practice, there is consistency with the practice of US companies and with theory. Moreover, the practice of Romanian companies is consistent also with the recommendations of Romanian university professors.\r\nHowever, the method of determining the indicators needs to be analyzed in more details. This could make a huge difference in the relevance of the final result.\r\nThe purpose of this article is to show the reality in the “market” of the preference of which indicators are used in capital budgeting and in the same time to suggest studying in depth the correctness of capital budgeting practice. Moreover, it can become the starting point of debates and adopting good practices for Romanian companies in capital budgeting. \r\n

---