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A survey of capital budgeting techniques used by listed mining companies in South Africa

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dc.contributor.author Maroyi, Vongai
dc.contributor.author van der Poll, Huibrecht M
dc.date.accessioned 2012-09-05T15:03:42Z
dc.date.available 2012-09-05T15:03:42Z
dc.date.issued 2012-08-15
dc.identifier.issn 1993-8233
dc.identifier.uri http://hdl.handle.net/10500/6406
dc.description.abstract Capital budgeting is crucial in the maximisation of shareholder value as it depends on the capital budgeting decisions made by the managers. The capital budgeting techniques used by South African mines listed on the Johannesburg Securities Exchange (JSE) and the reasons behind their use were investigated. Questionnaires were conducted during the period of March to May 2011 to gather data. The results also indicated that the net present value (NPV) (69%), the internal rate of return (IRR) (46%) and the payback period (PB) (23%) are the most common techniques used to evaluate major projects. The main reason for the use of the NPV was its superiority as it accurately takes into account the time value of money. The IRR method is used owing to its ability to rank projects and to indicate the actual return of each project, thereby informing managers whether an investment will increase the company’s value. The results indicated that the continual use of PB was based on the simplicity of the technique. Financial officers (FOs) should also make use of other techniques for example, discounted payback period (DPB), profitability index (PI) and the real options which are of valuable in determining the feasibility of projects. en
dc.language.iso en en
dc.publisher African Journal of Business Management en
dc.subject Capital budgeting techniques en
dc.subject Net present value en
dc.subject Internal rate of return en
dc.subject Payback period en
dc.subject Mining companies en
dc.subject South Africa en
dc.title A survey of capital budgeting techniques used by listed mining companies in South Africa en
dc.type Article en
dc.description.department Management Accounting en


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