ABSTRACT
The chapter opens with a discussion on the role of capital investment decisions in the decision-making process for an agribusiness. Next, basic tools used for analyzing capital investment decisions are discussed using example calculations. The methods discussed include payback, simple rate of return, net present value, and internal rate of return. The advantages and disadvantages of each of the methods are discussed, along with specific data needs for net present value and internal rate of return. Finally, the decision criteria used to accept or reject a capital investment project are discussed.
