Accounting and Finance for Capital Budgeting - MyAssignmenthelp.com

Question: Discuss about theAccounting and Finance for Capital Budgeting. Answer: Need to Consider Ethics in Capital Budgeting by the Companies It is significant for companies to believe in ethics at the time of capital budgeting process as that help in taking appropriate capital investment decisions (Abor, 2017). Capital budgeting is a process that companies uses for determining the advantages of any given investment project. Hence, the decision made should be ethical in nature so that there is no issue present in the upcoming years of operations. Any unethical decision will hamper the company to large extent. The decision made should be ethical, be it accepting or denying for any investment project that becomes a part of initiative taken by the companies in the upcoming financial year (Myers, 2014). Citing an instances where ethical consideration has been taken into account at the time of capital budgeting process In the year 2009, ExxonMobil is one of the largest oil companies that had acquired the XTO resources worth of $41 billion (Abor, 2017). Here, the example that is cited is the acquisition that was a part of capital budgeting decision where the company had made financial commitment at the same time. So, here it is understood that Executives are losing up jobs only because of poor investment decisions so ethical considerations should be taken into account. The ethical consideration must be preserving the confidential data, honesty, reliability as well as faithfulness. Therefore, it all about understands the financial as well as investment decision as it is considered as paramount of actions that results in getting successful capital investment decisions (Myers, 2014). Reference List Abor, J. Y. (2017). Evaluating Capital Investment Decisions: Capital Budgeting. In Entrepreneurial Finance for MSMEs (pp. 293-320). Springer International Publishing. Myers, S. C. (2014). Interactions of corporate financing and investment decisionsimplications for capital budgeting. The Journal of finance, 29(1), 1-25.