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Unformatted text preview: n expectation of a future return. These expenditures
include outlays for advertising, research and development, management
consulting, and new products. Other capital expenditure proposals—such
as the installation of pollution-control and safety devices mandated by
the government—are difficult to evaluate because they provide intangible
returns rather than clearly measurable cash flows. 3. Decision making. Firms typically delegate capital expenditure decision making on the basis of dollar limits. Generally, the board of directors must authorize expenditures beyond a certain amount. Often plant managers are given
authority to make decisions necessary to keep the production line moving.
4. Implementation. Following approval, expenditures are made and projects
implemented. Expenditures for a large project often occur in phases.
5. Follow-up. Results are monitored, and actual costs and benefits are compared with those that were expected. Action may be required if actual outcomes differ from projected ones....
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This document was uploaded on 01/19/2014.
- Fall '13