A STUDDY ON

“CAPITAL BUDGETING”

With reference to
“PANASONIC CARBON INDIA LTD”
Tada

A project report submitted to SVU, TIRUPATI in a partial fulfillment for the

award of the degree of

MASTER OF BUSINESS ADMINISTRATION (MBA)

Submitted by
CHILAMATHURU.LOKESH.

Under the esteemed guidance of

Dr. S. SHAHINA BEGUM
ACCORD BUSINESS SCHOOL
(AFFILIATED TO SVU)

{College logo}

CHIGURUVADA,
TIRUPATI,
2019-2021
 DECLARATION
I hereby declare that the project report “CAPITAL BUDGETING” with
reference to “PANASONIC CARBON INDIA LIMITED” has been prepared by me
during the period 07-05-2020 to 10-06-2020 is partial fulfillment of the
requirement for the award of degree of Master of Business Administration of
S.V.U, Tirupati.

I also declare that this project is result of my own effort and that it has not
been submitted to any other university for the award of any degree.

Place: TIRUPATI
Date:
(Chilamathuru.Lokesh)
 ACKNOWLEDGEMENT
A successful project can never be prepared by single effort or the
person to whom the project is assigned but it also demand help and
guardianship of some conversant persons who helps in the undersigned
actively or passively in the completion of successful project.

With great pleasure, I express my deep sense gratitude to the

management of “Panasonic Carbon India Limited” , Tada for giving me
this very inspirational opportunity to do my observation study in their
reputed company to take this opportunity to express my deep and
profound gratitude to the people concerned who have helped me
directly or indirectly in successful completion of this project.

(CHILAMATHURU.LOKESH )
 CONTENTS
CHAPTER-1 INTRODUCTION TO THE STUDY
CHAPTER-2 INDUSTRY PROFILE
CHAPTER-3 COMPANY PROFILE
CHAPTER-4 PROJECT PLANNING
CHAPTER-5 DATA ANALYSIS AND INTERPRETATION OF DATA
CHAPTER-6 FINANCE OF THE PROJECT
CHAPTER-7 EVALUATION OF CAPITAL BUDGETING
CHAPTER-8 FINDINGS AND SUGGESTIONS
SIGNIFICANCE
 CHAPTER 1
INTRODUCTION

1.1 INTRODUCTION OF THE STUDY:

Every organization irrespective of its size and mission can be viewed as a
financial entity management of an organization. Financial management focuses
not only on the improvement of funds but also on their efficient use with the
objective of maximizing the owner’s wealth. The allocation of funds involves the
commitment of funds to assets and activities.

There are two types of investment decisions:

1. Management of current assets.
2. Long term investment decisions.

Long term investment decisions are widely known as capital budgeting or capital
expenditure budgeting. It mean as to whether or not money should be invested in
long term project. This part is developed to an in-depth and comparative decision
of capital budgeting/capital expenditure management.
A project is an activity sufficiently self-contained to permit financial and
commercial analysis. Inn must cases projects represent expenditure of capital
funds by pre-existing entities which want to expand or improve their operation.
In general project is an activity in which, we will spend money in expectation of
returns and which logically seems to lead itself to planning. Financing and
implementation as a unit, is a specific activity with a specific point and a specific
ending point intended to accomplish a specific objective.
To take up a new project , involves a capital investmen6t decision and it is the top
management’s duty to make a situation and implementing it financing is a rapidly
existing field, which focuses not on the credit status of a company, but on cash
flows that will be generated by a specific project.
Capital budgeting has its origins in the natural resources and infrastructure
sectors. The current demand for infrastructure and capital investments is being
fueled by deregulation in the power, telecommunications, transport sectors, by
the globalization of product markets and the need for manufacturing scale, and
by the privatization of government owned entities in developed and developing
countries.
The capital budgeting decisions procedure basically involves the evaluation of the
desirability of an investment proposal. It is obvious that the firm must have a
systematic procedure for making capital budgeting decisions.
The procedure must be consistent with the objective with the objective of wealth
maximization. In view of the significance of capital budgeting decisions, the
procedure must consist of step by step analysis.

1.2 Importance of investment decisions:

Capital investments representing the growing edge of a business are deemed to
be very important for three inter-related reasons.
1. They influence firm growth in the long term consequences capital invest
decisions have considerable impact on what the firm can do in future.
2. They effect the risk of the firm; it is difficult to reverse capital investment
decisions because the market for used capital investments is will organize
and/or most of the capital equipment’s bought by a firm to meet its specific
requirements.
3. Capital investment decisions involve substantial out lays.

“INFOSYS LIMITED” is a growing concern, capital budgeting is more or less a

continuous process and it is carried out by different functional areas of
management. All the relevant functional departments play a crucial role in the
budgeting decision process.
1.3 objective of the study:
1. To describe the organization profile of “INFOSYS LIMITED”
2. To discuss the importance of the management of capital budgeting.
3. Determination of proposal and investments, inflows and out flows.
4. To evaluate the investment proposal by using capital budgeting techniques.
5. To summarize and to suggest for the better investment proposal.

1.4 Scope of the study:

This study highlights’ the review of capital budgeting and capital expenditure
management of the company. Capital expenditure decisions expenditure
management of the company. Capital expenditure decisions require careful
planning and control. Such long term planning and control of capital expenditure
is called capital budgeting. The study also help to understand how the company
estimates the future project cost. The study also helps to understand the analysis
of the alternative proposals and deciding whether or not to commit funds to a
particular investment proposal whose befits are to be realized over a period of
time longer than one year. The capital budgeting is based on some tools namely
payback period, average rate of return, net present value, profitability index and
internal rate of return.

1.5 Methodology:
The information for the study is obtained from two sources namely.
1. Primary sources.
2. Secondary sources.

SECONDARY SOURCES: