Capital Budgeting
Introduction and Alignment
Organizations invest in projects to research new product development, and to improve operations, customer
service, data management, facility locations and conditions, and so on. These types of projects are major
undertakings for the organization and come with a hefty price tag. Before investing large sums of money,
managers and analysts should evaluate whether the project will generate a return that will ultimately maximize
shareholder wealth and be in the organization’s best interest. Analysis tools used in capital budgeting provide a
basis for making informed fifinancial decisions.
Upon completion of this assignment you will be able to:
Demonstrate the strategic importance of capital budgeting to finance.
Resources
Textbook: Fundamentals of Corporate Finance
File: Chapter 9 - Net Present Value and Other Investment Criteria.pptx
Background Information
In Chapter 9 you will gain exposure to the analysis tools used in capital budgeting. Capital spending involves
expenditures that will benefit the organization over time, so it is important to properly assess and allocate funds
needed for this spending. This assignment will assess your ability to accurately apply these analytical tools.
Instructions
1. In your textbook, Fundamentals of Corporate Finance, read:
a. Chapter 9, “Net Present Value and Other Investment Criteria”
2. Download and review the Chapter 9 - Net Present Value and Other Investment Criteria.pptx PowerPoint to
help you further understand the chapter.
3. Navigate to the threaded discussion and respond to the following prompts:
a. Application: How could capital budgeting be applied in your organization or to your personal finances?
b. Not-for Profit Entities: Are the capital budgeting criteria discussed in the chapter applicable to
not-for-profit corporations or the government? How so?
4. Your discussion should be based on the chapter reading, as well as other resources that can contribute to the
discussion.
5. Your initial post should be 150 to 300 words in length and include at least one academic source that is
properly cited. Your initial post is due by the end of the fourth day of the workshop.
6. Respond to two of your classmates’ postings, writing as if you were reviewing their postings in an
academic journal. Your discussion responses should therefore answer the following questions as
applicable:
a. Are your classmates’ arguments articulate and logical? Are their facts correct?
b. Are your classmates’ interpretations reasonable and consistent with experts in the field? Are
your classmates consistent with both the substance and intent of their references?
7. Your discussion responses should not focus on whether or not you agree with your classmates, but how well
they present their positions. Each response should be at least 150 words in length and cite at least one
academic source. Please strive to make your discussion responses either extend the scholarly discussion in
a productive direction, or offer thoughtful analysis that helps your classmates deepen their own
understanding.
Assessment Criteria
Criteria 10 Points 8-9 Points 6-7 Points 0-5 Points
Initial You demonstrated You demonstrated You demonstrated You demonstrated
Postin clear, insightful critical competent critical limited critical little to no critical
g thinking and provided a thinking and thinking and thinking and provided
detailed explanation for provided a basic provided little little if any
the application of explanation for the explanation for the explanation for the
T
capital budgeting. application of capital application of capital application of capital
budgeting. budgeting. budgeting.
f
Introduction and Alignment
Organizations invest in projects to research new product development, and to improve operations, customer
service, data management, facility locations and conditions, and so on. These types of projects are major
undertakings for the organization and come with a hefty price tag. Before investing large sums of money,
managers and analysts should evaluate whether the project will generate a return that will ultimately maximize
shareholder wealth and be in the organization’s best interest. Analysis tools used in capital budgeting provide a
basis for making informed fifinancial decisions.
Upon completion of this assignment you will be able to:
Demonstrate the strategic importance of capital budgeting to finance.
Resources
Textbook: Fundamentals of Corporate Finance
File: Chapter 9 - Net Present Value and Other Investment Criteria.pptx
Background Information
In Chapter 9 you will gain exposure to the analysis tools used in capital budgeting. Capital spending involves
expenditures that will benefit the organization over time, so it is important to properly assess and allocate funds
needed for this spending. This assignment will assess your ability to accurately apply these analytical tools.
Instructions
1. In your textbook, Fundamentals of Corporate Finance, read:
a. Chapter 9, “Net Present Value and Other Investment Criteria”
2. Download and review the Chapter 9 - Net Present Value and Other Investment Criteria.pptx PowerPoint to
help you further understand the chapter.
3. Navigate to the threaded discussion and respond to the following prompts:
a. Application: How could capital budgeting be applied in your organization or to your personal finances?
b. Not-for Profit Entities: Are the capital budgeting criteria discussed in the chapter applicable to
not-for-profit corporations or the government? How so?
4. Your discussion should be based on the chapter reading, as well as other resources that can contribute to the
discussion.
5. Your initial post should be 150 to 300 words in length and include at least one academic source that is
properly cited. Your initial post is due by the end of the fourth day of the workshop.
6. Respond to two of your classmates’ postings, writing as if you were reviewing their postings in an
academic journal. Your discussion responses should therefore answer the following questions as
applicable:
a. Are your classmates’ arguments articulate and logical? Are their facts correct?
b. Are your classmates’ interpretations reasonable and consistent with experts in the field? Are
your classmates consistent with both the substance and intent of their references?
7. Your discussion responses should not focus on whether or not you agree with your classmates, but how well
they present their positions. Each response should be at least 150 words in length and cite at least one
academic source. Please strive to make your discussion responses either extend the scholarly discussion in
a productive direction, or offer thoughtful analysis that helps your classmates deepen their own
understanding.
Assessment Criteria
Criteria 10 Points 8-9 Points 6-7 Points 0-5 Points
Initial You demonstrated You demonstrated You demonstrated You demonstrated
Postin clear, insightful critical competent critical limited critical little to no critical
g thinking and provided a thinking and thinking and thinking and provided
detailed explanation for provided a basic provided little little if any
the application of explanation for the explanation for the explanation for the
T
capital budgeting. application of capital application of capital application of capital
budgeting. budgeting. budgeting.
f
