Investigating the Relationship between Research and Development Expenditures and Capital Budgeting Methods in Advanced Technology Industries

Document Type : Research Paper

Authors

1 Assistant Professor, Department of Accounting, Rasht Branch, Islamic Azad University, Rasht, Iran

2 PhD Student, Department of Accounting, Rasht Branch, Islamic Azad University, Rasht, Iran

Abstract

One of the main challenging decisions which business unit managers always face is how to choose investment projects. Capital budgeting is a process which  evaluates and selects the various investment opportunities by the manager. In addition, research and development spending is expected to be a factor  influencing decisions related to the budgeting of capital. Therefore, the purpose of this research is to investigate the relationship between R&D expenditures and capital budgeting methods, including net present value, payback period, return on investment and capital cost. For this purpose, 97 companies were surveyed in Tehran Stock Exchange between 1391 and 1395.
The results showed that  research and development expenditures were significantly associated with capital budgeting methods, with the exception of capital cost. In general, the results indicate that research and development expenditures have affected the capital budgeting methods, which could be considered by managers in the field of management accounting.

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Main Subjects

References

 
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Financial Management Strategy
Volume 8, Issue 3 - Serial Number 30
October 2020
Pages 232-252

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History

  • Receive Date: 05 November 2018
  • Revise Date: 06 March 2019
  • Accept Date: 10 March 2019

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