Discussion: Time Value of Money and Capital Budgeting

If you were to think about your personal life in the way a financial manager would think about their professional decisions, how do you think you would you approach some long-term financing decisions? For example, if you were gifted $30,000, would you consider how to get the best return over a 5-, 10-, or 20-year period? How might these concepts apply when trying to decide between buying a new car, fixing a current car, leasing a car, and buying a used vehicle? In this week's Discussion, you will turn your focus to long-term financing needs for the organization.

Case Study: Trucking Company

By Day 3

Post a summary of the value of a capital investment project for your selected organization using time value of money concepts. In your summary, do the following:

• Identify at least one capital investment for which the organization will need to secure financing in the coming fiscal year and provide a brief description of the project (type of project, estimated costs and allocation of funds, etc.). Note: This could be based on an actual situation, or you may use your creativity to come up with a possible project for the organization.
• Identify what questions you would have, as a manager, about the company's financial position before engaging in this type of investment.
• Using the concept of time value of money as the basis for your explanation, propose why the capital investment would or would not be of value to the organization at this time.

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