Investment Decision-Making Practices in Colombia: A Survey

Abstract

Operations Research and Capital Budgeting techniques were introduced in Colombia in the late 50's. In a survey conducted during 1980, about one-half of the large firms in Bogota, Colombia use discounted methods for investment decisions, as compared to about two-third of the firms in the United States. These figures are comparable with the ones found in U.S.A. in the mid 70's. Forty two firms out of the top 100 largest firm in the country answered the survey. These methods are all the more important in the Colombian economy which has a considerably higher rate of inflation and a monetary policy designed for credit restrictions.

Note: This is a description of the article and not the actual abstract.

Keywords: Capital budgeting techniques, NPV, IRR, risk analysis

JEL Classification: G31, G38, L6, L7, L8, L9, N86, N80