Answer to Question #206522 in Management for Prabhdeep

Question

SUBJECT : PROJECT PLANNING AND CONTROL

1. Explain in detail the relation between capital budgeting and risk analysis?

Answer 1

Relationship between capital budgeting and risk analysis

           Capital budgeting has a great relationship with risk analysis in the financial fields. First, it's a planning process that involves determining organizations' long-term investments worth going after. On the other hand, risk analysis plays the role of comparing and contrasting deterministic and probabilistic methods used in capital budgeting (lima et al., 2017). Finally, risk analysis helps manage information on possible results for the management team to judge and come up with conclusions on the investment to accept and reject the rest.

Reference

Lima, A. C., da Silveira, J. A. G., Matos, F. R. N., & Xavier, A. M. (2017). A qualitative analysis of capital budgeting in cotton ginning plants. Qualitative Research in Accounting & Management.