Personal Reflection Essays
Personal experience in finance
Finance is an exciting career that touches every bit of our daily life; the financial application is an important aspect of self-management and management of various projects that I would be interested in setting up in life. Life projects and economic independence is highly dependent on financial skills. Financial education skills are not only essential for application in the economic and fiscal markets career but also are used for personal management. Roberts, Dr, and R. Michael assess that capital budgeting is an important tool to plan projects and spending as an individual and a corporate setting. Knowledge in capital budgeting will improve my outcomes in financial and personal projects.
Chapter Summary
In personal and corporate investment decisions capital budgeting is an important tool to improve planning and decision making. Capital budgeting influence an organization short term and long term production of assets. Most capital investments involve large outlays and long-term commitments that are not easily reversed and have implications on long-term personal investment decisions. Capital budgeting helps draw relationships between different projects and also align various capital projects so as to align resources for all the projects.
Capital budgeting helps define the types of projects and also make decisions regarding the projects at hand. There are a number of capital budgeting techniques that are applicable in managing capital projects and decisions. Net present value helps compare the value of expected benefits and cash flows from a project. The larger the projects are, the higher the benefits, the more feasible a project becomes. In addition, capital budgeting use internal rate of return which help compare the cost of capital and the rate of return. This chapter also provides the required methodologies and techniques to establish the required time for invested capital to mature. This time is also referred to as payback period and is a valuable tool in making decisions regarding which project to invest.
Personal application of capital budgeting
Information on capital budgeting will go a long way in improving my decision making in the management of my personal projects and also application in my practice and career. Capital budgeting knowledge will help improve my decisions and advisory to the managers at the newspaper agency I work on a part time basis (Dellavigna, Stefano, and Joshua M. Pollet 238). Due to my thin budget, it allows me to focus on small investment projects that I can use the net project value knowledge to assess the feasibility of the projects. Project payback period in my personal investments will help establish and make right decisions regarding investment decisions.
Capital budgeting will help develop my knowledge and skills to plan my project timeline as well as assess my future projects feasibility to improve decision making and improve my investment decisions. Time is of the essence in project management and investment; it helps establish the right cash flows and payback period which will contribute to developing right decisions on the course of the project to improve the project outcomes and productivity. Capital budgeting information will improve my ability to manage my personal resources to enhance my personal development through the application of capital budgeting techniques. This will improve the quality of my project predictions and ensure that I only invest in feasible projects. Capital budgeting knowledge will help enrich my career and education. Information on capital budgeting is more applicable in education development and idea of giving back to the community through development projects that will help the children have basic budgeting techniques.
Work Cited
Dellavigna, Stefano, and Joshua M. Pollet. "Capital budgeting versus market timing: An evaluation using demographics." The Journal of Finance 68.1 (2013): 237-270.
Roberts, Dr, and R. Michael. "Topic 6: Investment Decisions and Capital Budgeting." (2013).
