The importance of having a formal capital investments process

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The importance of having a formal capital investments process

Finance Assignment 

Task II.

The importance of having a formal capital investments process


-Survival, a going concern
-Long term from an economic point of view 
-Financially viable 
-Must have Formal Step by Step process

-You have to develop the long-term goals on the organization
-Must have the ability to appraise and also to value different projects
-Stakeholders (shareholders, costumers, employees)
-Innocent owned by Coca Cola. Good example of real world. (Healthy product) L’Oreal bought body shop for reputation. (Another good example from real world)
-Seek out new projects/investments is not necessary to invest in the nature that you are in, you can choose another one
- Estimate future cash flows
-Ensure that information is transferred to all involved; many decisions have to be made in investing a new project (Decision making, you need the information)
- Monitor and control expenses
-Make an objective and transparent decision 
-Why is it important? -/

Capital budgeting process

Stages in the capital budgeting process

-Initial investigation into the proposed project
-Detailed evaluation 
-Authorization
-Implementation what is necessary who takes respons. 
-Project monitoring –cost, benefits 
-Post completion audit