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The Use of Capital Budgeting Techniques as a Tool for Management Decisions: Evidence from Jordan

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8th International Conference on Engineering, Project, and Product Management (EPPM 2017) (EPPM 2017)

Part of the book series: Lecture Notes in Mechanical Engineering ((LNME))

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Abstract

The authors explored the use of capital budgeting techniques (CBTs) by industrial companies listed on the Amman Stock Exchange (ASE) in 2016. Population of the study included (50) public shareholding industrial companies out of all (63) industrial companies registered in 2016. The final response rate of the respondents that are subject to analysis is (42) which constitutes (79.4%) out of the population, and (84%) out of the sample size. Statistical methods such as one sample t test, correlation, and regression analysis were used. The study concludes that CBT were not all equally used; companies adopted a combination of NPV, PI, PBP, ARR and IRR to manage their investment decision- making. The obstacles of the application have scored a combined average of (62. 6%). At the same time, our research shows that most frequently adopted techniques are discounted cash flows based techniques which have equal practice among group of companies. The study recommends that Companies should handle with strict care CBT, because of its impact on future of the company. These methods should be supported and given more attention. Future research may focus on the merit is to explore the effect of capital budgeting methods on performance.

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Author information

Authors and Affiliations

  1. Department of Accounting, Al-Zaytoonah University of Jordan, Amman, Jordan

    Mohammad Ebrahim Nawaiseh, Moh’d Attar & Azeez Al-nidawy

  2. Al-Quds College, Amman, Jordan

    Hala Al-nawaiseh

Authors
  1. Mohammad Ebrahim Nawaiseh
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  2. Hala Al-nawaiseh
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  3. Moh’d Attar
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  4. Azeez Al-nidawy
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Corresponding author

Correspondence to Mohammad Ebrahim Nawaiseh .

Editor information

Editors and Affiliations

  1. Faculty of Engineering and Natural Sciences, Bahçeşehir University, Beşiktaş, Istanbul, Turkey

    Sümer Şahin

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Nawaiseh, M.E., Al-nawaiseh, H., Attar, M., Al-nidawy, A. (2018). The Use of Capital Budgeting Techniques as a Tool for Management Decisions: Evidence from Jordan. In: Şahin, S. (eds) 8th International Conference on Engineering, Project, and Product Management (EPPM 2017). EPPM 2017. Lecture Notes in Mechanical Engineering. Springer, Cham. https://doi.org/10.1007/978-3-319-74123-9_32

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  • DOI: https://doi.org/10.1007/978-3-319-74123-9_32

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-74122-2

  • Online ISBN: 978-3-319-74123-9

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