Capital budgeting is a complicated process that is essential to good investment decisions by a company. Please give an example of a capital budgeting decision a company might need to make.
Are there examples in using the cost of capital in personal life? When or how have you compared the cost of getting money to the potential benefit of that money?
Once a business computes its cost of capital, discuss how a manager might decide whether to take on a project or not. How are capital project investments prioritized?