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Answer Posted / m.s.s.v.sri kumar
Budgeting for longterm resources may be termed as Capital
budgeting. Decisions for accepting certain project can also
be termed as capital budgeting. There are two models in
capital budgeting. 1) Traditional and 2) Modern.
Under the Traditional model the capital budgeting can
be done on 1) Pay back period method and 2) Accounting
rate of return method (ARR)
Under Modern technique model it can be done on 1) Net
present value method; 2) Profitability Index method; 3)
Internal Rate of Return method. (IRR)
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