A profit and loss statement is prepared by every business firm. They want to know how they performed over time. They will also want to know their current position at a specific point in time. This information can then be used to prepare a proper balance sheet. They will also want to know where they are going, which leads to the preparation and implementation of a budget. Long men have used the term budgeting. Budgeting has been confused with planning for a long time. A plan is a part of the budget. You can express a plan in both monetary and non-monetary terms. A budget is any plan that qualifies in monetary terms. A budget can therefore be described as a statement that is qualified in monetary terms. There are several types of budgets that can be prepared by companies when budgeting. These budgets include the cash budget, capital budget, and sale budget. Budgeting is the process of creating a capital budget.

The capital budget is a long-term budget that's used to acquire or expand fixed assets. Today, many firms prepare the capital budget.The United States of America is where it was initially created (U.S.A). In America, it was used by every firm prior to the second world war. Many firms realized the importance of planning for capital expenditure after the second world war. Nigerian brewery limited and other beverages are included in the list of firms that plan for capital expenditure. It is not an easy task, and it is fraught with many problems.

STATEMENT OF PROBLEM

A private company is set up to generate enough sales revenue to cover both fixed and variable costs as well as make some profits that justify its existence. A Nigerian brewery is a private company that produces beer. Its primary objective is to make a huge profit. Due to the export of their product to neighboring African countries and the high beer consumption in Nigeria, brewery all over Nigeria see a heavy return on their investments. This was before 1982. Many economic measures were introduced after 1982 to improve the nation's economic situation. The brewery industry was not exempt from these new economic measures. To produce, a firm in the brewery sector (*including the Nigerian brewery restricted) must acquire both fixed assets and raw materials. The expected demand is the basis for this acquisition. Due to the general price rises, it is difficult to estimate the beer demand. The general rise in beer prices has caused consumers to shift to other goods to meet their needs. This has resulted in a decrease in beer demand. Because the production capacity is constantly affected by changes in demand, the uncertainty around the rate of beer demand decline has made the capital budget difficult. The uncertainty surrounding the change in demand has created a capital budgeting problem. There is also the problem of tariffs and import restrictions on fixed assets and spare parts imports. This singular problem has contributed to the company's greatest problems. This has made it necessary for breweries in Nigeria to look for other ways of obtaining the fixed assets they need for production and operation. The import tariff restriction often led to an increase in the cost of fixed assets even if they are sourced from the. This uncertainty has created a capital budget problem. Due to the increase in fixed assets and limited financial capacity, firms like Nigerian breweries were unable to rank the projects they wished. This problem is faced in the selection of the project that will address the human problem within the organization. The problem of selecting the right person for a project is never solved. The selection of the human factor is an important aspect of capital budgeting due to the limited nature of the financial capability.

Nigerian brewery limited used an external source of funding to finance its capital project. Trade creditors and commercial banks are examples of external sources of financing. Some financial institutions. A bank or other financial institution may charge interest on money they lend. The economic environment changes can cause interest rates to fluctuate. Because of the dynamic nature and impact on the interest rates, capital budgeting is difficult. Even if the problem is solved in large part, it remains a problem to obtain foreign currency to pay the exporters rate. This rate is not stable. Capital budgeting is affected by this uncertainty.

PURPOSE OF STUDY

The study was designed to determine the following.

1. Find out how Nigerian breweries use capital evaluation techniques to evaluate their projects
2. Determine if a well-evaluated project will provide the right return for the investor
3. Consider the other factors that influence the selection of a project to invest in.
4. The budgeting process at the Nigerian brewery is limited in its ability

SIGNIFICANCE DETAILS OF THE STUDY

Capital budgeting is crucial for any economy's productivity and commercial success. This can cause you to lose your flexibility. This information was taken from essential management finance by J.C Wilson and E.A Brighton. After the commitment of funds to projects, the relationship between asset growth and sale proper phasing and the quality and availability of the capital asset, as well as the failure of a company due to too little equipment, will be discussed. Firms invest large amounts of capital to ensure that they have a capital budget.

His capital commitment has a long-term effect that causes him to lose flexibility in his decision-making. In addition to losing flexibility due to the long-term age of events, future sales and expansions of fixed assets are always forecast. An asset that has a five-year economic life span must be acquired. This means there will be a forecast of when the sale will take place. Failure to accurately forecast the sale of a fixed asset will result in under-investment. The results of the research will have a significant impact on the decision-making process of the Nigerian brewery limited. It will also be important to investors who are looking to invest in capital projects. It will also be of great importance to scholars and researchers who might want to conduct further research on the subject or a related topic.

STATEMENT OF HYPOTHESIS

1. Ho: The company management uses adequate evaluation techniques to make good decisions

Hi, the company's evaluation methods are not sufficient to support good decision-making

1. Ho: The evaluation of the capital project is not important in Nigerian breweries

Hi, the evaluation of capital projects is not an important part of Nigerian breweries.

SCOPE OF STUDY

The study will look at the capital budgeting methods of Nigerian breweries. It will also be able to establish if there is a relationship between the budgeting strategies adopted by the firm and the theory.

LIMITATIONS TO THE STUDY

This type of study is fraught with limitations. Access to the documents: This is the biggest limitation that we have encountered so far. It is not only difficult to access the document, but it is also challenging to do academic research within the firm. Because the firm holds secrets that they won't like anyone to read, this is why it is so difficult to access the documents. This was a major impediment to the study. Time constraint: An unlimited study of defilement areas of interest around the globe would have been possible if there had been enough time. This was because time constraints would have prevented extensive research in this area of capital budgeting.

Insufficient information: A researcher conducted an interview to try to get a glimpse of some documents. The interviewer was afraid to reveal the secret information of the company, so the document requested could not be obtained. It was not easy to obtain oral information.

DEFINITION OF THE TERM

Capital budgeting: A long-term plan for spending on fixed assets for the production and sale of goods and services.

Finance: This term refers to the donation of the acquisition or expending fund in order to achieve an economic unit goal

Cash flow: This is simply the flow of cash into a company, such as from revenue.

Capital asset: A long-term asset that is used for the production of goods.

Capital rationing is the allocation of scarce capital resources to economically desirable projects that are not possible to finance or are otherwise constraint.

Ranking: This is how projects are arranged according to viability and their evaluation results.