Impact of Firm Size on Capital Budgeting Techniques: An Empirical Study of Textile Firms in Pakistan

Developing Country Studies, ISSN 2224-607X (Paper), ISSN 2225-0565 (Online), Vol. 4, No.18, 2014

7 Pages Posted: 27 Oct 2014

See all articles by Muhammad Arslan

Muhammad Arslan

Bahria University Alumnus; Lincoln University (NZ)

Rashid Zaman

Lincoln University New Zealand

Muhammad Sidiqui

Bahria University

Date Written: October 26, 2014

Abstract

This study examines the type of capital budgeting methods used by textile firms in Pakistan and impact of firm size on these methods. This study also investigates the relationship between the total assets of the firm and annual turnover of the firm according to primary capital budgeting technique used. Questionnaire method is used as a source of gathering primary data. SPSS is used as tool for analysis of data. Cross tabulation is applied on each variable. Chi square test is also applied to investigate the relationship between total assets of firm and total turnover of the firm according to primary capital budgeting technique used. Findings of this study reveal that net present value method and internal rate of return are two mostly used methods. Findings also show that there is no relationship between the total assets of the firms and turnover of the firm according to capital budgeting technique used by firms. These results are well supported by the literature.

Keywords: Net Present Value, Chi Square, Pakistan

Suggested Citation

Arslan, Muhammad and Zaman, Rashid and Sidiqui, Muhammad, Impact of Firm Size on Capital Budgeting Techniques: An Empirical Study of Textile Firms in Pakistan (October 26, 2014). Developing Country Studies, ISSN 2224-607X (Paper), ISSN 2225-0565 (Online), Vol. 4, No.18, 2014. Available at SSRN: https://ssrn.com/abstract=2515073 or http://dx.doi.org/10.2139/ssrn.2515073

Muhammad Arslan (Contact Author)

Bahria University Alumnus ( email )

44000 Islamabad
Pakistan
+923317500173 (Phone)

HOME PAGE: http://www.muhammadarslan.info/

Lincoln University (NZ) ( email )

PO Box 85084
Ellesmere Junction Road/Springs Road
Lincoln, 7647
New Zealand

Rashid Zaman

Lincoln University New Zealand ( email )

Ellesmere Jct Rd, Lincoln 7647
Chrsitchurch, 7647
New Zealand

Muhammad Sidiqui

Bahria University

E.8 Shangrilla Road
Naval Complex
Islamabad, 44000
Pakistan

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