Assignment: Factors in Capital Budgeting Decisions

Imagine you are a representative of management in the company you have selected for your Week Six assignment and you must make a capital budgeting decision. The decision is to implement a new computer network system to decrease the time between customer order and delivery. The cost will be 10% of last year's profits. You are charged with describing the important considerations in the decision-making process to upper management. In your response, be sure to include the following:

A description of the important factors, in addition to quantitative factors, that were considered when making this capital budgeting decision.

An explanation of how these factors are significant to the company.

A summary of how you will determine the criteria to rank capital budgeting decisions and whether some criteria are more important than others.

A calculation of the proposed return on investment based on criteria you select and justification for that ROI.

Develop a 200 - 250 word explanation supporting your recommendations.

Tip: For help with reading an annual report access this handy guide from Money Chimp.