ABSTRACT
For the longevity of any business, managers need to continually replace and augment fixed assets to maintain the business's competitive position and ultimately help it to grow. Put simply, it takes money to make even more money. This requires prudent decisions to choose exactly where, when and how to invest limited sources of money on competing capital projects, and is known as capital budgeting (the planning process used to determine sizeable investments in the long-term assets of an organization – Dayananda, Irons, Harrison, Herbohn and Rowland, 2002). Robust financial techniques are required to carefully evaluate, compare and select between investments that optimize an organization's cash flow and rate of return.
