Application Research Of Flexible Capital Budgeting In The Enterprise Investment Activity

Under the condition of tight competition of business and fast change of market,the decision of an enterprise's investment is the key element to it's life and die.However, the capital budgeting can provide wide information to the enterprise'sinvesting. With the time going, investments have been more and more complicated,which makes the capital budgeting hardly be executed directly, then we have toimprove the original method to resolve the complexities of the investments smoothly.This paper is based on aim of the enterprises finance management theory, valueof cash-time theory, etc. to research how to use capital budget smoothly throughanalyzing how to deal with the complexity of investment.It contains 4 parts:Part 1.Statement of 5 common methods of capital budgeting including NVP, IRR,etc and analysis of advantage & disadvantage of the methods based on the theoryhypothesis.Part 2.Details of how to use above methods practically and compare them.andIntroduction the real option theory to revise the basic methods of capital budget.Part 3.Theory of using capital budgeting smoothly and analysis of the complexityof investment and their effects on capital budget.Part 4.Using matter of facts and theory analysis to support above complexitydescribed in part 3, for instance, the risk, inflation, etc. and present advice on how toresolve problems from both cash flow and rate of profit.