ABSTRACT
An area of major consequence for agribusiness managers is making capital investment decisions. Capital investment refers to the addition of durable assets to an agribusiness, which usually require relatively large fi nancial outlays and will last over a long period of time. Typical capital investments might include trucks, manufacturing equipment, or storage facilities. Even relatively small fi rms can spend millions each year on capital investments. These investments tie up funds for long periods and release them slowly as the investment produces revenue. The impact of these investment decisions may affect the business for years to come. In addition to deciding whether or not to make a specifi c investment, the agribusiness manager must also decide how to fi nance the investment. Capital investments can be fi nanced through cash purchase, borrowing, or leasing.
