Optimal capital budget
Optimal capital budget is the size of the capital budget where the rate of return on the marginal project is equal to the marginal cost of capital.
Definitions
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Optimal capital budget. The size of the capital budget where the rate of return on the marginal project is equal to the marginal cost of capital.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
