We have finally hit it: the mother of all corporate finance. Capital budgeting. Here is where our hard work has pointed us. How do we use our analytical tools to make good, sound and solid decisions?
It was not too long ago that someone here in Washington, DC counseled that we should not let a good crisis go to waste. We can debate the wisdom of the media message and the context in which that advice was given. However, as your professor, I proffer that as business people coming of age now, you will be all the better for the wear.
It is relatively easy to make capital decisions in times where resources are plentiful. However, it takes a different discipline and rigor to conduct capital budgeting when resources are constrained. Charles Alsdorf offers insight into this dynamic.
Reflect a moment on the "food fight" that Alsdorf references. What does this mean? Discuss the notion of balancing financial and strategic benefits in the capital budgeting process. What can our holistic approach to financial management offer in this process?