week 1 - Capital Budget Evaluation 1 CAPITAL BUDGET...

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Capital Budget Evaluation 1 CAPITAL BUDGET RECOMMENDATION Capital Budget Recommendation Randi Padavano ACC 543 Dr. Sandria S. Stephenson, Ph.D., CPA University of Phoenix May 30, 2011
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Capital Budget Evaluation 2 Capital Budget Recommendation Guillermo Furniture Company is a store owned by Guillermo Navalez, which is located in Sonora Mexico. This furniture store has been successful for selling furniture for many years. Within the last several years, Guillermo Navalez’s business has been decreasing due to globalization. The furniture store has encountered declines because of automation by the competitors. This competition has increased production costs and reduced profit margins for Guillermo Furniture Company. Now, Guillermo must decide a way to positively change how the business operates to increase profits. The capital budget must be examined to determine how Guillermo can fix the business. Business Alternatives Guillermo Furniture Company needs to assess the situation and understand the different alternatives. The company has several options, such as merging with another company or investing in a better technology for producing furniture. Certain technologies exist that assembles the furniture in a fast manner versus a human assembling the furniture. Competitors use high tech technology, which lowers the cost of producing the furniture. Lowering the cost of producing furniture generates a greater profit. While there are many other alternatives for Guillermo, better technology and merging with another company are the most feasible alternatives. These two suggestions will allow for a greater profit margin . Capital Budget Techniques
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This note was uploaded on 12/15/2011 for the course ACC ACC taught by Professor Mari during the Fall '10 term at University of Phoenix.

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week 1 - Capital Budget Evaluation 1 CAPITAL BUDGET...

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