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Non-Financial Factors Involved in Capital Budget Investments

1. Some nonfinancial factors included in capital investment decisions are more important now than they were 20-25 years ago. Give some examples of the types of nonfinancial factors that managers would consider more important in today's capital investment decisions than they were in the past.

2. What level of management would be involved in making capital investment decisions? Why? Why are these decisions more critical than day-to-day decisions made by individuals and companies?

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Capital investment decisions refer to projects that involve investing in assets. Examples may include a plant or equipment to do a job. Managers usually use methods such as payback period, internal rate of return, or Net Present Value to evaluate the economic viability of a project. It is also important to evaluate non-financial factors as well when making capital budgeting decisions. Examples of ...

Solution Summary

A description of non-financial factors considered by management when making capital budget decisions. This solution discusses factors to consider that may not be quantifiable.