After reading the unit lesson and textbook chapters, discuss how a firm can add value by combining traditional capital budgeting techniques with an alternative strategy and consider sustainable capital. Your paper should synthesize at least one alternative technique into the capital budgeting process. Justify how this technique creates value in an organization.

Your case study should be at least two pages in length, double-spaced.

Use a minimum of three scholarly articles, in addition to the textbook, from the CSU Online Library, or other scholarly sources to support your work.

In-text citations and reference page must be properly formatted using APA style guidelines.

An abstract is not required.

Reference and title pages do not count towards the minimum page requirement.

Here is the case study:

Benjamin Sharpe successfully built his commercial real estate business by investing in undervalued properties. Sharpe relied on traditional capital budgeting measures like net present value (NPV), internal rate of return (IRR), profitability index (PI), an d payback to evaluate real estate investments. Especially when Sharpe first started his business, he found sources of capital were limited and had to ration capital amongst the best opportunities determined by traditional capital budgeting methods. As Sh arpe's business grew, he developed alternative sources of capital and could rely more on outside capital sources to grow his business. For example, Sharpe established a credit line with his bank, built relationships with other commercial real estate invest ors, and had a solid financial track record he could take to the bond and stock markets to raise capital. Besides building greater access to capital, Sharpe believed opportunities existed in the market he could only take advantage of if he made an investm ent in them. Only with time would these opportunities come more clearly into focus. Sharpe knew also if he did not invest in these opportunities early on he could lose the opportunity to reap the rewards from them. Because of the uncertain possibilities, Sharpe believed he could reshape the capital budgeting process in his company to consider all potential opportunities instead of losing some of them. Sharpe asked Milton Muller, his chief financial officer, to revisit the capital budgeting process to consi der these uncertain projects. Armed with this directive from Sharpe, Muller started to explore other ways to evaluate projects that would consider those highly uncertain ones that could materialize down the road. Muller belonged to a financial officers gr oup and decided to see what some other chief financial officers used to evaluate uncertain projects and include them in the mix. Meanwhile, Sharpe observed the financial recovery saw more people starting to move to the city because of the cost of commuti ng and the lack of jobs in suburban areas. Businesses also expressed a preference to locate in urban areas for a more stable

labor supply and a more central location. Urban areas had a higher concentration of space and many existing buildings either needed renovation and rebuilding or major remodeling. Sharpe clearly needed a new plan to take advantage of these trends. Despite his reliance on traditional capital budgeting methods, Muller kept an open mind about exploring new ways to evaluate projects and a dd value to the firm. Muller learned other companies used some other methods to evaluate projects and consider some of the more uncertain opportunities. For example, Muller learned more about other techniques such as real options, decision trees, and Monte Carlo analysis from his financial officer's group.