Analysis of the Capital Budgeting Practices: Serbian Case
This paper addresses two major research questions: which techniques firms in Serbia use for project evaluation, and how the Serbian companies calculate their cost of capital. The authors have created the questionnaire and the sample consisting of 65 companies that responded to the enquiry (out of 39...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
University of Belgrade, Faculty of Organisational Sciences
2016-09-01
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| Series: | Management |
| Online Access: | http://management.fon.bg.ac.rs/index.php/mng/article/view/38 |
| _version_ | 1819137342449909760 |
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| author | Lidija Barjaktarovic Katarina Djulic Renata Pindžo Ana Vjetrov |
| author_facet | Lidija Barjaktarovic Katarina Djulic Renata Pindžo Ana Vjetrov |
| author_sort | Lidija Barjaktarovic |
| collection | DOAJ |
| description | This paper addresses two major research questions: which techniques firms in Serbia use for project evaluation, and how the Serbian companies calculate their cost of capital. The authors have created the questionnaire and the sample consisting of 65 companies that responded to the enquiry (out of 392) during the year 2015. The results showed that payback criterion is the most dominant capital budgeting technique used by firms in Serbia. Further, the results revealed that large firms as well as multinational firms are more inclined to use discounted cash flow capital budgeting techniques and other sophisticated techniques. Finally, the authors have concluded that the CAPM is not the dominant method for calculating cost of capital by the companies from the sample analyzing the overall sample. Consequently, skilled human capital, the adequate knowledge and developed procedures may contribute to accepting capital budgeting techniques such as discounted cash flow analysis and other sophisticated techniques by larger portion of the companies in Serbia. Finally, existence of perfect financial market is a necessary precondition for implementing all these contemporary financial concepts and its development has to be posed as one of the priorities in the years to come. |
| first_indexed | 2024-12-22T10:49:21Z |
| format | Article |
| id | doaj.art-92ad57abeb02459cbfb210ab9e504f34 |
| institution | Directory Open Access Journal |
| issn | 1820-0222 2406-0658 |
| language | English |
| last_indexed | 2024-12-22T10:49:21Z |
| publishDate | 2016-09-01 |
| publisher | University of Belgrade, Faculty of Organisational Sciences |
| record_format | Article |
| series | Management |
| spelling | doaj.art-92ad57abeb02459cbfb210ab9e504f342022-12-21T18:28:49ZengUniversity of Belgrade, Faculty of Organisational SciencesManagement1820-02222406-06582016-09-012179475438Analysis of the Capital Budgeting Practices: Serbian CaseLidija Barjaktarovic0Katarina Djulic1Renata Pindžo2Ana Vjetrov3FEFA - Faculty of Economics, Finance, and Administration, BeogradFEFA - Faculty of Economics, Finance, and Administration, BeogradMinistry of Trade, Tourism and TelecommunicationFEFA - Faculty of Economics, Finance, and Administration, BeogradThis paper addresses two major research questions: which techniques firms in Serbia use for project evaluation, and how the Serbian companies calculate their cost of capital. The authors have created the questionnaire and the sample consisting of 65 companies that responded to the enquiry (out of 392) during the year 2015. The results showed that payback criterion is the most dominant capital budgeting technique used by firms in Serbia. Further, the results revealed that large firms as well as multinational firms are more inclined to use discounted cash flow capital budgeting techniques and other sophisticated techniques. Finally, the authors have concluded that the CAPM is not the dominant method for calculating cost of capital by the companies from the sample analyzing the overall sample. Consequently, skilled human capital, the adequate knowledge and developed procedures may contribute to accepting capital budgeting techniques such as discounted cash flow analysis and other sophisticated techniques by larger portion of the companies in Serbia. Finally, existence of perfect financial market is a necessary precondition for implementing all these contemporary financial concepts and its development has to be posed as one of the priorities in the years to come.http://management.fon.bg.ac.rs/index.php/mng/article/view/38 |
| spellingShingle | Lidija Barjaktarovic Katarina Djulic Renata Pindžo Ana Vjetrov Analysis of the Capital Budgeting Practices: Serbian Case Management |
| title | Analysis of the Capital Budgeting Practices: Serbian Case |
| title_full | Analysis of the Capital Budgeting Practices: Serbian Case |
| title_fullStr | Analysis of the Capital Budgeting Practices: Serbian Case |
| title_full_unstemmed | Analysis of the Capital Budgeting Practices: Serbian Case |
| title_short | Analysis of the Capital Budgeting Practices: Serbian Case |
| title_sort | analysis of the capital budgeting practices serbian case |
| url | http://management.fon.bg.ac.rs/index.php/mng/article/view/38 |
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