On completing this chapter, you should know about
- The meaning of the terms payback period, net present value, and internal rate of return and their role in programming
- The issues involved in choosing a discount rate for assessing a capital project
- The impact of political and behavioral matters on the choice of capital projects
- The issues associated with undertaking a benefit-cost analysis, especially when it involves quantifying the value of a human life
Chapter 6 briefly described two aspects of planning in a responsibility accounting system: programming and budgeting. These represent long-range and short-range planning activities, respectively. In the programming phase of the management control ...