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A Strategic Framework to Use Payback Period in Evaluating the Capital Budgeting in Energy and Oil and Gas Sectors in Oman

Author

Listed:
  • Mawih Kareem Al-Ani

    (Dhofar University, Oman.)

Abstract

This study aims to examine the associations between strategic variables and use the payback period (PBP) in evaluating the capital budgeting decisions from the perspective of managers and investors in Oman. These variables are risk, liquidity, profitability, market obstacles, management compensation and size of the company. The two samples are investors and managers where 57 out of 65 managers and 57 out of 75 investors were selected to answer the questionnaire of the study. The questionnaire consisted of seven sections with 17 questions. The regression test showed that the risk and management compensation variables have an impact on the use of PBP from the perspective of managers. Also, the risk and profitability variables have an impact on the use of PBP from the perspective of investors. On the second level of analysis, the finding of the study indicates that there are no statistically differences between managers and investors to use the PBP traced to the any of the six variables.

Suggested Citation

  • Mawih Kareem Al-Ani, 2015. "A Strategic Framework to Use Payback Period in Evaluating the Capital Budgeting in Energy and Oil and Gas Sectors in Oman," International Journal of Economics and Financial Issues, International Journal of Economics and Financial Issues, vol. 5(2), pages 469-475.
    • Handle: RePEc:eco:journ1:2015-02-18
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    References listed on IDEAS

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    1. Alkaraan, Fadi & Northcott, Deryl, 2006. "Strategic capital investment decision-making: A role for emergent analysis tools?," The British Accounting Review, Elsevier, vol. 38(2), pages 149-173.
    2. Pereiro, Luis E., 2006. "The practice of investment valuation in emerging markets: Evidence from Argentina," Journal of Multinational Financial Management, Elsevier, vol. 16(2), pages 160-183, April.
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    Cited by:

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    Keywords

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    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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