Systematic Literature Review on Capital Budgeting Techniques

Abstract

Organizations use capital budgeting to make strategic decisions that affect their long-term development, sustainability, and profitability. This study identifies sustainability considerations, environmental, social, and governance (ESG) factors, governmental policies and regulations that affect capital budgeting decisions, and key performance indicators (KPIs) that are frequently used in evaluating the success of capital investments. This systematic literature review (SLR) synthesizes the existing research on capital budgeting techniques. The examination includes sophisticated techniques such as real options analysis, simulation modeling, and decision trees, as well as a variety of capital budgeting approaches such as net present value (NPV), internal rate of return (IRR), and payback period. Researchers, experts and politicians aiming to expand their knowledge of capital budgeting procedures and guide future studies and activities within the field.