Capital investment appraisal: a comparison between theory and practice among Small and Medium Industries (SMI) in Malaysia / Nor Suhailati Abdul Manan, Eley Suzana Kasim and Saforah Abdul Rahman

Abdul Manan, Nor Suhailati and Kasim, Eley Suzana and Abdul Rahman, Saforah (2005) Capital investment appraisal: a comparison between theory and practice among Small and Medium Industries (SMI) in Malaysia / Nor Suhailati Abdul Manan, Eley Suzana Kasim and Saforah Abdul Rahman. [Research Reports] (Unpublished)

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Abstract

Capital Investment decision is one of the most crucial decisions that a business organization must make in order to assure future survival and wealth of the business. The effect of the decision made can be very devastating. Therefore appropriate investment decision must be made in order to secure the interest of the shareholders and stakeholders of the business. Based on theory, capital investment opportunities should be appraised by use of discounted cash flow methods such as net present value (NPV) and internal rate of return (IRR). However, in real, what is being practiced by most SMI companies is inconsistent with the theory. They tend to use Accounting Rate of Return rather than Discounted Cash Flow methods. Larger SMI firms are catching up with the theory by implementing proper procedures in appraising the capital investment opportunities, while smaller firms are moving slowly towards the same direction.

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Item Type: Research Reports
Creators:
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Abdul Manan, Nor Suhailati
UNSPECIFIED
Kasim, Eley Suzana
UNSPECIFIED
Abdul Rahman, Saforah
UNSPECIFIED
Subjects: H Social Sciences > HD Industries. Land use. Labor > Small business. Medium-sized business
H Social Sciences > HD Industries. Land use. Labor > Management. Industrial Management > Capital. Capital investments
H Social Sciences > HG Finance > Investment, capital formation, speculation
Divisions: Universiti Teknologi MARA, Melaka > Alor Gajah Campus
Item ID: 42651
Uncontrolled Keywords: Capital investment appraisal; Small and Medium Industries (SMI); Malaysia
URI: https://ir.uitm.edu.my/id/eprint/42651

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