Problem
I. Based on your knowledge concerning capital budgeting, discuss several factors that would increase the risk associated with a company's capital investment decision. In your opinion explain which factors increase the risk more than others.
II. Based on you knowledge concerning capital budgeting, discuss several factors that would decrease the risk associated with a company's capital investment decision. In your opinion explain which factors decrease the risk more than others.
III. Capital investment decisions are often incremental, involving cash flows over multiple periods. Therefore, procedures must be in place to monitor the progress of projects. One such procedure is the Milestone approach. Conduct a preliminary search to explain how this approach works and why the approach can sometimes be ineffective.
IV. To what extent have you seen evidence, what economic conditions have prompted American businesses to reevaluate their traditional approach to capital investment decisions?