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Empirical study on the effect of the return on investment on budgetary slacks in investment expenditures

Cadoret, Jeremy (2016): Empirical study on the effect of the return on investment on budgetary slacks in investment expenditures.

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Abstract

The purpose of this thesis is to undermine the possible effect of the return on investment on budgetary slacks. Prior literature on slacks, on the one hand, and return on investment on the other is rather extensive. Hence, we have been appraising the effect of the ROI on budgetary slacks in investment expenditures. For this purpose, we have been setting a cross-sectional study in a worldwide known company by using inferential statistics. We did not find any effect or possible association between this profitability ratio and budgetary slacks, however, we found that slacks could be highly influenced by the size of the project. Firstly, this might suggest that the ROI is not a good tool to manage budgetary slacks in investment expenditures and secondly, the fact that slacks could be influenced by size might undermine the “weaknesses” of some papers on this very subject.

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