The trend in many industries is toward greater fixed costs relative to variable costs. For example, H&R Block employees used to fill out tax returns for customers by hand. Now, computer software is used to complete tax returns. Safeway and Kroger employees use to key-in prices by hand on cash registers. Now, barcode readers enter price and other product information automatically. From your experience:
1) Identify a change where the cost structure of manufacturing or service operations shifted to greater fixed costs. What were the benefits and shortcomings of the change?
2) Identify a trend or potential new change and speak to the pros and cons?
Your initial post (1 to 2 substantive paragraphs, which would approximate 100 to 200 words) should address each question in the discussion directions and is due by 11:59 PM Central Time on Wednesday.
Capital budgeting is the process of evaluating and selecting long-term investment projects that can generate positive net present value (NPV) and contribute to a firm’s strategic objectives.
Part A: Conduct additional research (using the NLU library) and respond to the following discussion prompts. In your answer be sure to draw on your research and all relevant readings and videos in this week’s materials. Also, be sure to provide examples to support your answers.
What are some of the factors that firms should consider when making capital budgeting decisions, such as project size, risk, cash flow, timing, and financing options? How do these factors affect the profitability, risk, and flexibility of a firm’s investment portfolio?
How do firms incorporate strategic considerations into their capital budgeting decisions, such as competitive position, market growth, technological innovation, and sustainability? How do firms align their investment projects with their overall corporate strategy and goals, and how do they balance short-term and long-term priorities?
What are some of the challenges and pitfalls of capital budgeting, such as estimation errors, behavioral biases, capital rationing, and project interdependence? How do firms mitigate these challenges and ensure that their investment decisions are sound and aligned with their financial and non-financial objectives?
How do firms monitor and evaluate the performance of their investment projects, and what are some of the metrics and benchmarks they use, such as return on investment (ROI), net cash flow, and hurdle rate? How do firms adjust their capital budgeting decisions over time based on the actual performance and feedback from their projects?
Part B: While capital budgeting is often associated with for-profit firms, non-profit organizations also need to make long-term investment decisions that can support their mission and enhance their impact.
What are some of the types of investment projects that non-profit organizations might consider?
How do non-profit organizations evaluate these investments and how do they prioritize them?
Non-profit organizations also need to consider the sources of financing for their investment.
Your first posting should be approximately 400 words. You post your message by clicking on the “Create Message” button below. See the deadline for a first posting and instructions for your response posts in your syllabus. The deadlines can be found in your syllabus, at which time the discussion topic will be locked. Grading for this topic will be via the attached discussion rubric. Please cite scholarly references formatted in the most current APA format.
