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Capital budgeting: the Romanian university professors' points of view

Author

Listed:
  • Victor Dragota

    (Academia de Studii Economice / Facultatea de Finante, Asigurari, Banci si Burse de Valori)

  • Lucian Tatu

    (Academia de Studii Economice / Facultatea de Finante, Asigurari, Banci si Burse de Valori)

  • Daniel Pele

    (Academia de Studii Economice / Facultatea de Finante, Asigurari, Banci si Burse de Valori)

  • Nicoleta Vintila

    (Academia de Studii Economice / Facultatea de Finante, Asigurari, Banci si Burse de Valori)

  • Andreea Semenescu

    (Academia de Studii Economice / Facultatea de Finante, Asigurari, Banci si Burse de Valori)

Abstract

This study aims at validating the points of view of the Romanian finance university professors regarding capital budgeting. The study is original and important in the same time, taking into consideration that their opinions, due to their vocation of educators, may represent the starting point for debates on the most suitable methods and techniques used in the practice of this field. It can be noticed that the dominant points of view converge to the recommendations of the main reference works in the domain of corporate finance. Hence, indicators like net present value, internal rate of return or profitability index are the most preferred. Among the techniques of risk quantification, the sensitivity analysis is considered as the most suitable, followed by the Monte Carlo method and the scenarios technique. As for the discount rate used for the investment projects analysis, the most numerous respondents recommend the weighted average cost of capital.

Suggested Citation

  • Victor Dragota & Lucian Tatu & Daniel Pele & Nicoleta Vintila & Andreea Semenescu, 2010. "Capital budgeting: the Romanian university professors' points of view," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 2(2), pages 95-102, December.
    • Handle: RePEc:rfb:journl:v:02:y:2010:i:2:p:95-102
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    Cited by:

    1. Ingrid-Mihaela Dragota & Victor Dragota & Lucian Tâtu & Daniel Traian Pele & Nicoleta Vintila & Andreea Semenescu, 2011. "Capital Budgeting: the Romanian Credit Analysts’ Points of View," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 3(1), pages 039-045, June.
    2. Oualid Benallou & Rajae Aboulaich, 2017. "Improving Capital Budgeting Through Probabilistic Approaches," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 20(03), pages 1-21, September.

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