Examining the relevance of capital budgeting techniques in investment analysis, a case of Uganda health marketing group (UHMG).

Abstract

The general aim of this study was to examine the relevance of capital budgeting techniques in the investment analysis of the Uganda Health Marketing Group. The objectives of the study were; - to assess the techniques used in investment appraisal in UHMG, to determine the challenges faced during investment appraisals in UHMG, to assess the relevance of Capital Budgeting Techniques in Investment appraisal in UHMG. The study used a cross sectional design because data was collected at only one point in time. The study found out that UHMG does not use both the Accounting rate of return and net present value in appraise projects. The study concluded that majority of the respondents actually UHMG faces difficulties in incorporating risk while appraising projects, a challenge in Estimating cash flow, difficulties in Adjusting inflation during investment appraisal and difficulties in achieving competitive advantage over its competitors. The study recommends that Capital budgeting should provide a wide scope for financial managers to evaluate different projects in terms of their viability to be taken up for investments. The study recommends UHMG management should provide effective control on the cost of capital expenditure projects, should continue checking for over or under investments.