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Chapter 11
Capital Budgeting and
Team Investments
Introduction
is chapter focuses on capital budgeting techniques and the benets and costs
of dierent types of nancial investments that teams make. Capital budgeting is
the process of evaluating and selecting long-term investments that are consistent
with a rm’s goal. Almost every rm’s goals, at least in a nancial sense, include
the generation of prots. Capital budgeting typically refers to long-term invest-
ments. Although there are myriad nancial decisions that teams constantly make,
the focus in this chapter is on the longer term commitments that include the (1)
purchase of the fra