Abstract:
Capital Budgeting (CB) is a relatively established theory in investment realm and the
association of CB and the firm’s performance is addressed by several researchers
over the past few decades. Firms using sophisticated capital budgeting techniques
(CBTs) should theoretically perform better than firms using naive models such as the
payback period or accounting rate of return. In the Sri Lankan context, it is hardly
found evidence in CB. Therefore, the research is designed to tackle the above
“puzzling relationship” relates to Sri Lankan companies. Descriptive analysis was the
research method which was used to investigate the research problem. The principal
data collection techniques were questionnaire survey. Fifty (50) companies engage
in commercial perspectives were selected among public listed companies.
Subsequently, an investigation about the current practices of CBTs in Sri Lankan
companies is addressed through the research.
