... on the other, on having the tools and methodology to process its risk implications on the return of the project. A capital investment decision is like any other decision with certain distinctive characteristics: it involves high levels of expenditure, it will be made for a long time scale, these decisions are not easily reversible and are taken relatively infrequently, consequently the decisions to invest become a critical part of the business plan. The types of investment decisions against which investment appraisal can be applied include: * Expansion of buildings, plant, equipment and stock * New product lines, business diversification and new enterprises * Cost savings, such as technology versus labour * Whether or when to replace a piece of capital equipment * Choosing between alternative investments * Determining optimum financing options, such as lease versus purchase. Business decisions have to take into consideration a multitude of quantitative and qualitative factors. ...

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