Accounting and Auditing Research

Accounting and Auditing Research

Managers’ decision making based on capital budgeting and its effect on financial performance of public and private companies

Document Type : Original Article

Authors
Abdorreza Asadi
Ahmad Zendehdel
Negar Arashnia
Department of Management, Islamic Azad University
10.22034/iaar.2015.103778
Abstract
This study investigates performance measures based on capital budgeting methods. To test the first, second and third hypotheses, one sample t-test and for forth one chi square method are used in the study. A multiple regression model is also used to test fifth hypothesis. Required data collected from a sample of 80 companies comprising some listed firms of Tehran stock exchange along with some other private companies. The results indicate that public companies are more likely to use discounted methods to analyze their investment projects compared to private firms. It is also concluded that companies employing the discounted methods would have better financial performance in comparison with other companies. The study indicated a significant relationship between capital budgeting methods and firm’ financial performance. 
Keywords
Capital budgeting
Decision making methods
Discounted measures and Market value added
Accounting and Auditing Research
Volume 7, Issue 28
Winter 2016
Pages 54-71