Abstract
The main purpose of the current research was to examine the practices of Capital Budgeting Techniques (CBT) in the corporate sector of Pakistan, and to identify the factors that affect CBT’s selection during the capital budgeting decision process in Pakistan. In developing countries, researchers have not shown much interest in this regard. Under the Positivist philosophical approach, this study has adopted the quantitative survey method of research. Data was collected through convenient sampling from 173 CFOs/Finance Directors. For analysis, ordinal logistic and binary logistic regression was used. This study found that Pakistan’s corporate sector practices are different in some respects from the developed economies. Surprisingly, in Pakistan, in the corporate sector, the traditional Payback Period (PP) is still a dominant CBT, rather than the Net Present Value (NPV) and Internal Rate of Return (IRR). However, NPV is more popular than IRR. Publically listed, and large firms pay more attention to sophisticated CBTs than private and small firms. A positive discovery was that publicly listed firms have started incorporating Real Option (RO) and Sensitivity Analysis (SA) in their practice. Project duration and project size has a significant relationship in the selection of sophisticated CBTs

Muhammad Tariq, Sajid Rahman Khattak. (2019) Practices of Capital Budgeting Techniques: Evidence from the Corporate Sector of Pakistan, NUML International Journal of Business & Management, Volume 14, Issue 1.
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