Task: “Capital Budgeting”
Answer the following questions:
1) There is uncertainty in the market research forecasts from which you derive information to include in your own volume and price inputs for a financial proposal. How do you incorporate this uncertainty into your analysis?
2) If the land, which would be used for the project is already owned by the company and has an opportunity value. How would you measure the value of the land in its next best use? What costs would you look for that might be sunk costs and irrelevant in this analysis?