Capital Budgeting Techniques Used by SMES and the Role of Cost Data in Project Selection

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Please tick the option that best represents your view. All responses will be treated confidentially. Response Scale for Sections B, C, D, E Strongly Agree, Agree, Neutral, Disagree, Strongly Disagree Section A: Biodata 1. Gender: Male, Female, prefer not to say 2. Age: 18-25, 26-35, 36-45, 46-55, 56 and above 3. Highest Educational Qualification: SSCE, OND/NCE, HND/BSc, MSc/MBA, PhD/Professional 4. Position in the Business: Owner, Manager, Accountant/Finance Officer, Supervisor, Other 5. Years of Business Operation: 1-3 years, 4-6 years, 7-10 years, 11-15 years, Above 15 years 6. Number of Employees: 1-10, 11-25, 26-50, 51-100, Above 100 7. Business Sector: Manufacturing, Trading, Services, Agriculture, Other 8. Annual Turnover: Below 10m, 10m-50m, 51m-100m, 101m-250m, Above 250m 9. Business Location: Urban, Semi-urban, Rural 10. Do you prepare formal budgets for projects: Yes, No JAFM JAFM JAFM Section B: Awareness and Use of Capital Budgeting Techniques Scale: Strongly Agree, Agree, Neutral, Disagree, Strongly Disagree 11. My business is aware of capital budgeting techniques. 12. We regularly evaluate long-term investment projects before committing funds. 13. Payback Period method is used in my business for project evaluation. 14. Net Present Value method is used in my business for project evaluation. 15. Internal Rate of Return method is used in my business for project evaluation. 16. Accounting Rate of Return method is used in my business for project evaluation. 17. Profitability Index method is used in my business for project evaluation. 18. We use more than one capital budgeting technique for a single project. 19. Capital budgeting techniques help us to avoid investing in unprofitable projects. 20. The use of capital budgeting techniques has improved our decision making Section C: Role of Cost Data in Project Selection Scale: Strongly Agree, Agree, Neutral, Disagree, Strongly Disagree 21. Accurate cost data is critical for selecting projects in my business. 22. We collect detailed cost information before approving any project. 23. Initial investment cost is the most considered cost in our project selection. 24. Operating and maintenance costs are factored into our project appraisal. 25. Opportunity cost is considered when selecting between projects. 26. Cost of capital is used to discount future cash flows in our evaluation. 27. Poor cost data has led us to make wrong project decisions in the past. 28. We compare estimated cost with actual cost after project implementation. 29. Cost data helps us to determine the feasibility of a project. 30. The quality of our cost data directly affects the success of our projects. Section D: Challenges and Factors Influencing Capital Budgeting in SMEs Scale: Strongly Agree, Agree, Neutral, Disagree, Strongly Disagree 31. Lack of financial expertise is a major challenge in using capital budgeting techniques. 32. Inadequate record keeping limits our ability to use cost data effectively. 33. High cost of software/tools prevents us from using advanced capital budgeting methods. 34. Time pressure makes us rely on intuition rather than formal analysis. 35. Limited access to finance affects our ability to undertake appraised projects. 36. Management supports the use of formal capital budgeting techniques. 37. Government policies influence our project selection decisions. 38. Market uncertainty makes capital budgeting difficult in my business. 39. We receive training on capital budgeting and cost analysis. 40. The size of my business determines the complexity of capital budgeting used. Section E: Future Outlook Scale: Strongly Agree, Agree, Neutral, Disagree, Strongly Disagree 41. I believe capital budgeting techniques will become more important for SMEs in the future. 42. My business intends to adopt more sophisticated capital budgeting methods. 43. Improved cost data management will lead to better project selection. 44. Technology will play a key role in capital budgeting for SMEs going forward. 45. Training staff on capital budgeting will be a priority for my business. JAFM JAFM JAFM 46. The use of spreadsheets will increase for capital budgeting in my business. 47. Access to cheaper financing will encourage more capital budgeting in SMEs. 48. Government support can improve capital budgeting practices among SMEs. 49. Better cost data will reduce project failure rate in my business. 50. I am optimistic about the future performance of projects selected using capital budgeting. Thank you for your participation.