Capital Budgeting Decisions

Imagine that you are a manager at Radius Enterprises. You are considering a new project to expand into new markets. The projections for the profitability and success of the project appear to be excellent, so you discuss funding the project with the company's chief financial officer (CFO). After evaluating the project with additional financial analysis tools, the CFO recommends against funding it. Based on her analysis, it appears that the project is not the best use of company funds. These financial analysis tools allow managers to see more facets of a project and to make better-informed decisions. You review the cash flows for this project. To expand into new markets, the company will need to hire new employees, how do i do a marketing campaign, and support the effort in its first year of operations before the project begins generating revenue. This first year of operations is the investment under consideration.

You review the cash flows for this project. To expand into new markets, the company will need to hire new employees, prepare a marketing campaign, and support the effort in its first year of operations before the project begins generating revenue. This first year of operations is the investment under consideration. The cash flow projections over the first 5 years are projected to be: O 2 3 4 5 -R50K R12K R18K R20K R30K R50K