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Capital Investment Analysis & Time Value of Money Technique Discussion

 

The controller at Ranyah Corporation analyzed a proposed equipment purchase for the firm and decided that the investment met all the firm’s criteria regarding payback, net present value, and internal rate of return. Notwithstanding the positive results, top management decided to reject purchase of the machine. Elaborate on why a firm might reject a project even though it satisfies all the capital budgeting analyses.

Embed course material concepts, principles, and theories (requires supporting citations) along with at least one scholarly, peer-reviewed reference in supporting your answer. Keep in mind that these scholarly references can be found in the Saudi Electronic Library by conducting an advanced search specific to scholarly references.

You are required to reply to at least two peer discussion question post answers to this weekly discussion question and/or your instructor’s response to your posting. These post replies need to be substantial and constructive in nature. They should add to the content of the post and evaluate/analyze that post answer. Normal course dialogue doesn’t fulfill these two peer replies but is expected throughout the course. Answering all course questions is also required.

For Your SuccessIt is important to study the examples and videos regarding the calculation of net present value (NPV). Present values can be calculated by using the present value tables in the textbook. You may find that using a financial calculator or Microsoft Excel is beneficial in calculating present value.Make sure to read all the assigned readings and complete the Check Your Understanding activity.Discussions are an effective way to learn more insights regarding the capital budgeting process and share those insights with your classmates. There is a discussion question this week regarding what factors should be considered in capital budgeting projects. Embed course material concepts, principles, and theories (require supporting citations) along with at least one scholarly, peer-reviewed reference in supporting your answer. Keep in mind that these scholarly references can be found in the Saudi Electronic Library by conducting an advanced search specific to scholarly references.Learning Outcomes

Describe the relation of capital investment analysis to the management process.

  • Calculate capital investment evaluations including using net present value and internal rate of return.