Capital Investment decisions
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Last updated 10:00 AM on 4/5/26
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4 Terms
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What are the key traits of traditional investment appraisal?
Cash flows directly related to the project
Definite crisp estimates
Orderly and rational process aimed at wealth maximization
Uses the rational decision model
Decision makers have known, unambiguous objectives
Decision makers have full information about consequences of different alternatives.
2
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Explain operational investments?
More ‘everyday’
Readily conceptualised
Executed via routine decision making procedures
Sustaining current activities
3
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Explain strategic investments.
New innovative risky endeavours
Non-programmed
Complex
Long term
Gain competitive advantage
Uncertain
Subjective
4
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