Question 1
Investing in a capital project may involve making screening decisions, preference decisions, and funding decisions. Discuss how each of these decisions is made, the goal of each, and give an example of each.
Question 2
When making the decision to replace an old factory machine with a new one, financial and non-financial factors are considered. As with any investment, a company investing in factory machinery expects that the new machinery will generate a future return.
Required:
| a. | Define the two types of returns that can be expected from investments in a long-term |
asset such as factory machinery.
| b. | List three financial factors that a company might consider before making an |
investment
in factory machinery.
| c. | List three non-financial factors that a company might consider before making an |
investment in factory machinery.
| d. | List one cost that is not included in a decision to replace an old factory machine with |
a new one.
Sweat machine
Some uses of recombinant DNA technology for making improved vaccines
Use tap water when making coffee, tea, or juice from concentrate, and for food preparation
Sports drinks can replace electrolytes and fluids lost during exercise
ECG machine
Making recombinant DNA molecules