Capital Budgeting This activity is important because one of the most important jobs performed by the financial manager is to decide what fixed assets, projects, and investments will earn profits for the firm beyond the costs necessary to fund them. Every investment carries some risk. Risk is affected by many factors, including the political climate and economic stability of a region, time, and the stability and competitive nature of a marketplace and the world economy as a whole. Financial managers must constantly consider such issues when making long-term decisions about the purchase of fixed assets. The goal of this click and drag is to demonstrate your understanding of how to decide and prioritize spending of a capital budget. The American Widget Company (AWC) currently makes widgets primarily for the U.S. market. It wants to expand its production and has an idea for creating Superwidgets, and/or making existing widgets in a new color (blue). It is also toying with the idea of expanding into a new market: Japan. Before committing to an Investment, the company needs to explore all the options and establish which lines of expansion are high risk and which are low. It can then decide what would represent the best investment.