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Capital Investment Analysis and Project Assessment

Michael Boehlje and, Cole Ehmke (June, 2005)

Summary

Capital investment decisions that involve the purchase of items such as land, machinery, buildings, or equipment are among the most important decisions undertaken by the business manager. These decisions typically involve the commitment of large sums of money, and they will affect the business over a number of years. The procedures discussed in this publication teach you how to evaluate the decision, but if you have inaccurate or incomplete data, then an otherwise thorough and complete analysis will be misleading.