- CFA Exams
- 2023 Level I
- Topic 4. Corporate Issuers
- Learning Module 19. Capital Budgeting
- Subject 6. Common Capital Budgeting Pitfalls
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Subject 6. Common Capital Budgeting Pitfalls PDF Download
Here are some of the common mistakes that managers make:
- Economic Responses.
- Template Errors.
- Pet Projects.
- Basing Decisions on short-run accounting numbers.
- Basing Decisions on the IRR.
- Incorrectly Accounting for Cash Flows.
- Overhead Costs.
- Discount Rate Errors.
- Overspending and underspending the Capital Budget.
- Failure to Consider Investment Alternatives.
- Sunk Costs and Opportunity Costs.
Learning Outcome Statements
f. describe common capital budgeting pitfalls.CFA® 2023 Level I Curriculum, Volume 3, Module 19
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