FIN 534 Week 5 DQ 1
Based on what you discovered in the e-Activity, make at least two recommendations for regarding how your selected company should approach its capital budgeting. Explain the reasoning behind your recommendations.
A capital budgeting analysis conducts a test to see if the benefits (i.e., cash inflows) are large enough to repay the company for three things: (1) the cost of the asset, (2) the cost of financing the asset (e.g., interest, etc.), and (3) a rate of return (called a risk premium) that compensates the company for potential errors made when estimating cash flows that will occur in the distant future.