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CREATING VALUE: THE APPROPRIATE USE OF CAPITAL BUDGETING

Dr. Michael C. Ehrhardt, Dr. James M. Reeve

Managerial Finance

ISSN: 0307-4358

Article publication date: 1 May 1991

341

Abstract

Traditional approaches to capital budgeting may be inadequate in today's complex business environment. This paper identifies problems with a narrow approach to capital budgeting and suggests several improvements. In particular, an example illustrates an option‐based approach to valuing managerial flexibility.

Citation

Ehrhardt, M.C. and Reeve, J.M. (1991), "CREATING VALUE: THE APPROPRIATE USE OF CAPITAL BUDGETING", Managerial Finance, Vol. 17 No. 5, pp. 3-13. https://doi.org/10.1108/eb013679

Publisher

:

MCB UP Ltd

Copyright © 1991, MCB UP Limited

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