Capital Budget Recommendation

Guillermo Navalles, owner of Guillermo Furniture faces a decision that could make or break the success or failure of his business. Because of increased competition and costs, profits for the Mexican company have taken a hit. In some cases, many competitors are consolidating into larger companies; an option Navalles disagrees with. He is left with the decision to purchase high technological equipment or adopt a brokerage business model. Determining the best option involved a review of various capital budget evaluation techniques, scenarios given for each technique, and a plan of action recommended with the proper technique.