{"id":731,"date":"2018-04-19T22:41:47","date_gmt":"2018-04-19T22:41:47","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/?post_type=chapter&#038;p=731"},"modified":"2024-04-29T17:39:06","modified_gmt":"2024-04-29T17:39:06","slug":"introduction-to-capital-budgeting","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/chapter\/introduction-to-capital-budgeting\/","title":{"raw":"Introduction to Capital Budgeting","rendered":"Introduction to Capital Budgeting"},"content":{"raw":"<h2>What you'll learn to do:\u00a0Discuss capital budgeting<\/h2>\r\n<img class=\"alignright wp-image-1145 \" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/2985\/2018\/04\/11143534\/800px-Tesla_auto_bots.jpg\" alt=\"A car on the processing line.\" width=\"299\" height=\"209\" \/>\r\n\r\nCapital budgeting is used to describe how managers may deal with huge buying decisions, such as new equipment, new product lines or a new manufacturing facility. Since there might be quite a few options, it is important to evaluate each to determine the most efficient and effective path for a company to choose.\r\n\r\nHow well a manager can make these kinds of decisions will have a big impact on the financial health, long term, of the organization. We will discuss each of the methods that can be used to evaluate these kinds of decisions.","rendered":"<h2>What you&#8217;ll learn to do:\u00a0Discuss capital budgeting<\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-1145\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/2985\/2018\/04\/11143534\/800px-Tesla_auto_bots.jpg\" alt=\"A car on the processing line.\" width=\"299\" height=\"209\" \/><\/p>\n<p>Capital budgeting is used to describe how managers may deal with huge buying decisions, such as new equipment, new product lines or a new manufacturing facility. Since there might be quite a few options, it is important to evaluate each to determine the most efficient and effective path for a company to choose.<\/p>\n<p>How well a manager can make these kinds of decisions will have a big impact on the financial health, long term, of the organization. We will discuss each of the methods that can be used to evaluate these kinds of decisions.<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-731\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>What is Capital Budgeting?. <strong>Authored by<\/strong>: Freedom Learning Group. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Tesla Factory. <strong>Authored by<\/strong>: Steve Jurvetson. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/commons.wikimedia.org\/wiki\/File:Tesla_auto_bots.jpg\">https:\/\/commons.wikimedia.org\/wiki\/File:Tesla_auto_bots.jpg<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":62559,"menu_order":2,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Tesla Factory\",\"author\":\"Steve Jurvetson\",\"organization\":\"\",\"url\":\"https:\/\/commons.wikimedia.org\/wiki\/File:Tesla_auto_bots.jpg\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"What is Capital Budgeting?\",\"author\":\"Freedom Learning Group\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"b63703e3-9864-4662-9923-adc456efd370","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-731","chapter","type-chapter","status-publish","hentry"],"part":114,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters\/731","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/users\/62559"}],"version-history":[{"count":6,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters\/731\/revisions"}],"predecessor-version":[{"id":3225,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters\/731\/revisions\/3225"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/parts\/114"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters\/731\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/media?parent=731"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapter-type?post=731"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/contributor?post=731"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/license?post=731"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}