Capital Budget Recommendation

Capital Budget Recommendation - Capital Budget...

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Capital Budget Recommendation Guillermo Furniture produces budget and designer sofas. Based out of Sonora, Mexico, Guillermo has an ever expanding customer base in North America. As a new member of the Accounting department, Guillermo Navallez, owner of Guillermo Furniture, tasked me with determining which decision would provide the greatest return. To determine this, I will attempt to distinguish amongst the various capital budget evaluation techniques to clarify how these techniques can help make the suitable decision recommendation and course of action using the various techniques. Capital Budget Evaluation Techniques A good number companies utilize capital budgeting to authorize capital spending on projects that require a large investments of capital. Capital projects normally evaluated using both quantitative analysis and qualitative information. There are two capital budget evaluation processes that take into consideration the time value of money Net Present Value (NPV) and the Internal Rate of Return (IRR) (). When reviewing proposed investments, the evaluation of the time value of money is essential for
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This note was uploaded on 12/15/2010 for the course ACCT 543 taught by Professor Bess during the Spring '10 term at Mt. Olive.

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Capital Budget Recommendation - Capital Budget...

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