{"id":266384,"date":"2024-10-15T05:37:34","date_gmt":"2024-10-15T05:37:34","guid":{"rendered":"https:\/\/imarticus.org\/blog\/?p=266384"},"modified":"2024-10-15T08:04:17","modified_gmt":"2024-10-15T08:04:17","slug":"capital-budgeting-methods","status":"publish","type":"post","link":"https:\/\/imarticus.org\/blog\/capital-budgeting-methods\/","title":{"rendered":"Discounting vs. Non-Discounting Methods: Which is Better for Capital Budgeting?"},"content":{"rendered":"

In the world of business, every investment is a gamble. But a smart gamble is one based on sound judgement. That's where <\/span>capital budgeting methods<\/span> come in. Capital budgeting is a financial compass that guides businesses towards the most promising opportunities. One of the biggest decisions in this process is how to measure the value of these opportunities.<\/span><\/p>\n

There are two main paths: the discounting methods and the non-discounting methods. Let's learn more about the two methods and find out which one is better for capital budgeting and investment decision-making.<\/span><\/p>\n

If you wish to learn these two methods in more detail, you can enrol in a solid <\/span>financial analysis course<\/span><\/a>.<\/span><\/p>\n

Discounting Methods<\/span><\/h2>\n

Discounting methods consider the time value of money, recognising that money received today is worth more than the same amount received in the future. These methods calculate the present value of future cash flows using a discount rate.<\/span><\/p>\n