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| Author: | Cook, T. J. Rizzuto, R. J. |
| Title: | Capital budgeting practices for R&D: A survey and analysis of business week's R&D scoreboard. |
| Journal: | Engineering Economist
1989 : SUMMER, VOL. 34:4, p. 291-304 |
| Index terms: | CAPITAL BUDGETING R&D DISCOUNTED CASH FLOW NET PRESENT VALUE |
| Language: | eng |
| Abstract: | The results of a survey of USA corporations are discussed regarding the extent of the utilization of standard capital budgeting measures of investment worth to evaluate R and D projects. Responses were analyzed by three types of R and D activity: basic, applied and development research. The results indicate that discounted cash flow methods are widely used for development projects, but less widely in case of applied projects. The use of Net Present Value and Internal Rate of Return increases with firm size. Basic research projects are much less likely to be subjected to a formal economic analysis and are generally thought of as being "strategic" investments. The main objectives and economic measures of post-audits of projects are discussed. |
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