Question
Marcus was recently promoted to Product Lead, which requires he participates in his division's annual capital budgeting process. A financial analyst gives him a 2
Marcus was recently promoted to Product Lead, which requires he participates in his division's annual capital budgeting process. A financial analyst gives him a 2 hour training on what to expect from the process, and he learns that the company primarily relies on IRR to make decisions and that the CFO has a policy in place of using 12% as the hurdle rate (required return) for all projects.
Marcus is concerned about the effectiveness of the process given this information. What issues may arise as a result of these policies? (Discuss at least two issues, 4-6 sentences total.)
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