1. Imagine you are the consultant who has to make the recommendation on whether or not 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, and choose the one that would provide the most accurate measure for your anticipated rate of return requirement. Justify your recommendation.

2. Capital budgeting decisions are among the most important decisions facing business entities. Suggest specific milestones needed to evaluate the performance of capital projects, and suggest some ways to hold managers accountable for spending overruns.

3. A post-audit of a long term project is very important. Who should conduct this review and why? Should managers of the projects under review be held responsible for cost overruns?

4. the payback method is often criticized because it ignores the time value of money and cash flows after the payback has been reached. How could a simple payback calculation be used to compare projects that have been evaluated by using net present values?

Answer rating: 100% (QA)

Investment Decision Capital budgeting decisions are critical for any business and they play an important role in the business in deciding whether it is valuable to invest in a business or not There ar... View the full answer