The first project to use wolfs new capital budgeting

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Unformatted text preview: now recognized the key role that finance plays. The first project to use Wolf’s new capital budgeting procedures was a facility to wash and sanitize returnable bottles. Before replacing outdated equipment, managers analyzed the financial implications of six operating scenarios to determine the best alternative: moving the facility to Virginia. Every department that would be affected had input into the facility’s design and into estimates of its operating costs. The project team presented the complete business case to Wolf, who spent 6 months asking questions that resulted in cutting over 25 percent from the initial cost estimates. “I think the extra time was well spent,” says Wolf. “If you can reduce your capital costs, leverage the benefits, and get them faster, that’s the way to run your capital process.” In Wolf’s first 3 years at Coors, capital spending dropped 363 In Practice significantly, return on invested capital rose from 5.9 percent in 1995 to 8.8 percent in late 1997, and ca...
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This document was uploaded on 01/19/2014.

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