You are reviewing a capital budgeting analysis that was prepared by your boss (the controller) at the
Question:
You are reviewing a capital budgeting analysis that was prepared by your boss (the controller) at the request of the director of marketing. The director wants to purchase new software to manage all the company’s customer information and buying preferences. The analysis assumes the cost savings with the new system to be $50,000 per year for the next 5 years. You agree that the cost savings will be $50,000 in the first year but expect the savings to decline over the next 4 years as the company grows. When you question the controller, he tells you that he mentioned this to the director, but the director said to “make the numbers work” because the marketing department needs this software. What should you do?
Step by Step Answer:
Managerial Accounting
ISBN: 9780137689453
1st Edition
Authors: Jennifer Cainas, Celina J. Jozsi, Kelly Richmond Pope