Abstract:
The objective of this research was to examine the practices and challenge of capital budget that
is one of the most important factors for the success of an organization. The purpose of this study
is to assess and describe the practices and challenge of capital budgeting in DendiWoreda. The
practices and challenges of capital budgeting of the Ginchi Town was examined using an
analytical frame work of Likert scale measurements. Case study design with mixed research
approaches is employed. Research evidence was gathered distributing questionnaires to
managers and experts who are involved in practices and challenges of capital budgeting of the
Ginchi Town and Interview and document reviews were conducted to get sufficient evidence in
evaluating the practices and challenge of capital budgeting. The result shows that practice and
challenges of capital budgeting of the Ginchi Town is in line with the theory of capital
budgeting and empirical evidences. The Ginchi Town’s capital budgeting task organization
which the study tried to assess from planning, evaluation, implementation and post evaluation
work processes are found to be in line with the theory and the practices addressed in the
literature review section of the study. The study found that shortage of skilled manpower to be
practices and challenge for the capital budget of the Ginchi Town. Therefore, the researcher
recommends to the management of the Municipality office to focus on short term training to fill
the gap of knowledge which is implicated to exist in the study.
