Discussion Questions:
Remember, this is our classroom. After you address this week's questions, you can respond to any post I put in class for your additional posts, and you should also read and respond to posts from at least two other classmates. Posting 3 times is a MINIMUM expectation. Three posts will NOT earn you an excellent grade "A". For that you must go beyond the minimum expectation. Use outside research sources in addition to the videos and your text book (journals, news articles, etc. -- but NOT Wikipedia). Properly document your sources using APA style in-text references and a reference list.
In your first post, respond to these questions BEFORE you view the video in the next step:
1. How do we traditionally define capital budgeting in finance?
2. What is the purpose of capital budgeting in a business firm, and how is it used?
Visit the textbook website and view the following "Capital Budgeting" video:
o How Navistar Determined their Cost of Capital
After viewing the video, post your responses to the following questions. You should conduct outside research, in addition to watching the videos. (If you are unable to view the videos, use news articles, websites, etc. to support your answers).
1. Navistar Trucking has adopted a new approach to capital budgeting. What is the fundamental way in which the new approach differs from the traditional approach?
2. What is the goal of the new approach of capital budgeting?
3. Under what circumstances would a business firm drop a project chosen through the new capital budgeting approach?