Using Capital Budgets Techniques in Evaluating Investments Projects: Applied Study on Jordanian Industrial Corporations

Abstract

This study aimed to investigate capital budgets techniques used by Jordanian industrial corporations, exploring the extant use of capital budgets techniques used by industrial corporations. Ways of handling risks, discount rate and cash flows, and examined the relationship between using capital budget techniques with size and the financial performance of the industrial corporations. Questionnaires were distributed to 44 listed industrial corporations.The results of the study showed that: the most common used technique was the residual income by 75%, and then the payback period, the study showed that there is statistical significant difference in using of capital budgets techniques that depends on discounting of cash flows and the traditional techniques. And there is no a statistical significant difference in using capital budgets between corporations depend on their size, and their financial performance.

Keywords: Capital budgets; Jordanian industrial corporations; Financial performance.