Review phase in capital budgeting
What do you mean by Review phase in capital budgeting ?
Once the project is made to order the review phase has to be set in motion. Performance review should be done from time to time to evaluate actual performance with probable performance. A feedback device can be useful in several ways.
(i) It throws light on how realistic were the suppositions underlying the project;
(ii) It provides a documented record of experience that is extremely valuable in future decision making;
(iii) It proposes corrective action to be taken in the light of actual presentation;
(iv) It helps in finding judgmental biases;
(v) It encourages a desired warning among project sponsors.