Evaluate a Capital Budgeting Case Study , business and finance homework help
Subject
Business Finance
Question Description
Week 7 - Assignment: Evaluate a Capital Budgeting Case Study
Week 7 - Assignment: Evaluate a Capital Budgeting Case Study
Instructions
Part I:
One duty of a financial manager is to choose investments with satisfactory cash flows and rates of return. Therefore, a financial manager must be able to decide whether an investment is worth undertaking and be able to choose intelligently between two or more alternatives. To do this, a sound procedure to evaluate, compare, and select projects is needed. This procedure is called capital budgeting.
Virtually all general managers face capital-budgeting decisions in the course of their careers. The most common of these is the simple “yes” versus “no” choice about a capital investment. Regardless of the type of project, however, certain principles of capital budgeting should always be considered. The most important of these principles are: