Capital Budgetibng

In: Business and Management

Submitted By radheramesh
Words 3851
Pages 16
SRJIS/BIMONTHLY/ALBANUS MUNYAO (718-729)

THE RELATIONSHIP BETWEEN CAPITAL BUDGETING TECHNIQUES AND
FINANCIAL PERFORMANCE OF COMPANIES LISTED AT THE NAIROBI STOCK
EXCHANGE, KENYA
Albanus Munyao, South Eastern Kenya University P. O. Box 170-90200, Kitui-Kenya
Fredrick Mukoma Kalui, Egerton University, P. O. Box 536, Njoro-Kenya
Jacqueline Ngeta, South Eastern Kenya University P. O. Box 170-90200, Kitui-Kenya

Abstract
The general objective of the study was to find out the relationship between capital budgeting techniques and financial performance of companies listed in the Nairobi Stock Exchange. The specific objectives of the study were to determine the Capital budgeting techniques used in investment appraisal decisions amongst Companies listed at the Nairobi Stock Exchange. The study also aimed at establishing the relationship between Capital budgeting techniques and the financial performance of companies listed at the Nairobi Stock Exchange. The study employed a survey design to determine the capital budgeting techniques and their relationship with financial performance in companies quoted at the NSE. Primary data was collected through questionnaires which were dropped and picked from the respondents. Secondary data was collected from the published accounts of the companies. The target population consisted of all the 47 companies listed at The Nairobi Stock Exchange as at 30th June 2010. The choice of quoted companies was preferred because they represented the main sectors of the Kenyan economy, and are therefore considered as adequate representation of companies in Kenya. The study used multiple regression analysis to find the association between capital budgeting techniques and the financial performance of companies listed at the Nairobi Stock Exchange.
Forecasting model was developed and tested for accuracy in obtaining predictions. The…...

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