Capital budgeting practices in the Jordanian industrial corporations

Abstract

Purpose

The purpose of this paper is to provide additional empirical evidence about capital budgeting practices in an emerging economy.

Design/methodology/approach

The study utilizes a questionnaire and interview to collect data from respondents.

Findings

The results show that the JIC give almost equal importance to the discounted and undiscounted cash flow methods in evaluating capital investment projects. It appeared also that the most frequent used technique is the profitability index followed by the payback period.

Practical implications

Based on these results, the researchers recommend putting a great attention to apply the concepts and techniques of capital budgeting in an appropriate manner. The corporations should also consider importance of information technology and its applications in capital budgeting.

Originality/value

This is the first study applied on the capital budgeting practices and its related issues in the JIC.

Citation

Khamees, B.A., Al‐Fayoumi, N. and Al‐Thuneibat, A.A. (2010), "Capital budgeting practices in the Jordanian industrial corporations", International Journal of Commerce and Management, Vol. 20 No. 1, pp. 49-63. https://doi.org/10.1108/10569211011025952