“The cost of capital and capital budgeting techniques”. They provide us with the means to decide whether a particular project should be accepted or rejected from a quantitative standpoint. However, please present a “qualitative” factor that should be considered. Please discuss at length and don’t forget to respond to at least two of your colleagues’ posts as well. Colleagues posts - Christine Yesterday Aug 6 at 7:42pm All businesses that I have been a part of continuously demand the quantitative facts for projects; however, addressing and proposing the qualitative portions of the project are also a contributing factor and can sometimes be a struggle for management to receive the information. Qualitative information contains those other areas that are not statistical such as culture, environment, and sincere total commitment of the company. Statistically a project fairs very well on paper; however, adding those other qualitative variables into the mix may change the decision to approve the project or reject it. If a company is not sincerely committed to the approved project and see it through to completion even if there are problems/bumps/hurdles along the way, then the project should be rejected. The commitment comes not only from management but carries along through to the end employee, every piece must be committed to see the project through. If management believes there could be a break in that commitment, then a rejection is the only option. Another area to review prior to approving or rejecting a project is the community. How will the community receive the project? How will it benefit the community? There are many times a project might impede on the community’s lifestyle or the way they do business every day. Will the community accept the project as a positive addition? If not, or if the community will boycott or protest the project then possibly the project is not in the best interest of the company and should be rejected. The qualitative information must be included with the quantitative data when reviewing the full scope of the project to determine if it should be accepted or rejected. Any missing piece could lead the approved project to a complete failure which is not in the best interest of the company. Joseph 6:14pm Aug 7 at 6:14pm The qualitative factors associated with the cost of capital and capital budgeting techniques are generally components that are not concrete numerical data. In other words, qualitative factors may be considered abstract, or unquantifiable. These factors may be human capital, environmental, social, certain technique, mores, values, etc. The environmental aspect of conducting a business is one consideration that needs to be heavily considered. As time passes information arises concerning certain products and their negative impacts on the environment. Many of these products were once heavily sought after, but are now continuously pillaged by environmental groups. Right in the Livingston County Community, we are seeing the environmental impacts of PFAs, which was and still is in a vast array of products. We are seeing continual pressure against plastic products in all forms, whether those products are straws, packaging, beverage containers, or what have you. These environmental qualitative factors must be carefully considered as a new project is considered as they are often impossible to quantify and often gradually become more serious issues.

Answer rating: 100% (QA)

In the course of deciding whether a particular project should be accepted or rejected the manager ma... View the full answer