CAPITAL BUDGETING PRATICE: A COMPARATIVE STUDY AMONG ELECTRICITY SECTOR COMPANIES

Resumen

This paper aims to provide evidence about the practices of the capital budgeting for electricity sector companies. To achieve the objective of the study is used a questionnaire to collect data of three electricity sector companies, with operations in generation, transmission and distribution of electricity. The results show that among the methods used to evaluate the investment budget, the discounted cash flow is predominant, and the weighted average cost of capital in setting the minimum rate of return acceptable for new investments, this rate is not equal for all investments. The research shows that the scenario analysis and Monte Carlo simulation are the main techniques adopted by companies in risk analysis of investments, while the critical stage of the investment process is the implementation of the project. It is also worth noting that all the companies highlight the event of uncertainty or predictability when it comes to financial market behavior. Moreover, globally, the information related to the flow of outputs and inputs projected cost of capital and minimum rate of return in addition to the macroeconomic data are obtained more often by companies.