... the identification of alternative capital expenditure investments that will achieve an organisation's goals and strategies. Some alternatives may be rejected at this stage whilst others may be evaluated thoroughly in the next stage, which is the information-acquisition stage. Information- acquisition stage: consideration of costs and benefits of each alternative identified in the information - acquisition stage. These consequences can be quantitative and qualitative. This stage involves setting project selection criteria (what method to use) and conducting sensitivity analysis. Selection stage: choosing project(s) to implement based on the information provided in stage three. Managers choose projects whose predicted outcomes (benefits) most outweigh expected outcomes. Numerical decisions are re-evaluated by managers carefully in light of non-financial and qualitative factors. Financing stage: in this stage the organisation seeks to obtain project funding. Sources of finance will normally include internally generated cash and the capital market. Available funds constrain project selection. The source of finance is often ...

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