Imagine you are the consultant who has to recommend whether to purchase Anheuser-Busch.

Determine the rate of return you could expect from your investment and the method you would use to evaluate the investment decision. Assess the disadvantages and advantages of each investment method located in Case 4 of Graduate Accounting Capstone Cases and choose the one that would provide the most accurate measure for your anticipated rate of return requirement. Justify your recommendation

DQ#2. The payback method is often criticized because it ignores the time value of money and cashflows after the payback period

has been reached.  How could a simple payback calculation be used to compare with projects that have been evaluated by using

the net present value method?

DQ#3  A post-audit of a long-term capital project is very important.  Who should conduct this review?  Should managers of the

project being reviewed always be held responsible for cost overruns?

DQ#4 Capital budgeting decisions are among the most important decisions facing business entities.  Suggest one

specific milestone needed to evaluate the performance of a capital project.  Suggest some ways to hold managers

accountable for spending overruns.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply