The Impact of the Payback Period and Accounting Rate of Return on Investment Decisions

Evidence from Foreign Companies Investing in the Iraqi Environment

Abstract

              This study aims to examine the feasibility of developing international capital budgeting standards that are more appropriate for international companies in making investment decisions. It also aims to identify the equations for measuring the results of international capital budgeting standards, which contribute to determining and predicting future cash flows. The research sample comprised analysts, investors, academics, financial managers, and those interested in foreign investment and financial data analysis for all service contract fields. We distributed (343) valid questionnaires for analysis. The questionnaire included a set of paragraphs and questions, the data of which were collected and classified using the statistical program (SPSS). The study concluded that one of the most important requirements for preparing international capital budgeting is obtaining accurate and appropriate financial and non-financial information for decision-making, and that increasing the value of the payback period standard by one unit leads to an increase in the degree of suitability and reliability of investment decision outcomes by 0.63. A one-unit increase in the accounting rate of return (ARR) increases the relevance and reliability of investment decision outcomes.