Capital Budgeting

Capital budgeting is a process used to evaluate whether a firm should invest in a new project or other long-term capital expenditure. 

Discussion Questions:

1. Why is the capital budgeting process an important process that every organization should consider carefully?

2. Compare and contrast at least four capital budgeting techniques. Which technique is considered as the best capital budgeting technique? Why? 

3. Describe the relationship between the cost of capital and the NPV.

4. Explain how a change in the cost of capital can impact the IRR 

Directions to student: The final paragraph (three or four sentences) of your initial post should summarize the one or two key points that you are making in your initial response. You will be writing three or more discussion posts per week. Your main post must be two to three substantive paragraphs 150-200 total words and include at least two APA-formatted citations/references. Please follow up with two subsequent replies to colleagues. Each reply should consist of a relevant paragraph containing 100 words or more.