Capital budgeting—the state of the art

Abstract This article is based on a review of 57 studies relating to capital budgeting practice undertaken between 1948 and 1986 and a new study concerning practice within the very largest U.K. companies. The results of the new study were based upon questionnaire responses provided by 131 group accounting respondents and 216 divisional respondents, which corresponded with response rates of 60 and 63 per cent respectively. The results obtained from the analysis of postal questionnaire responses concerning the use and importance of capital budgeting techniques were confirmed in interviews conducted with 11 group accounting and 20 divisional questionnaire respondents.