for this discussion, prepare 3–4 paragraphs as if a new colleague you are mentoring who is not as knowledgeable as you about finance or accounting reads the above statement.

Capital Budgeting

The president of a large company was asked why the company was holding onto a large amount of cash, instead of investing the cash. The reply was, "Because we see a lack of available positive NPV projects."

For this discussion, prepare 3–4 paragraphs as if a new colleague you are mentoring who is not as knowledgeable as you about finance or accounting reads the above statement. Consider:

· Detailing for your colleague what the statement means and why it is important.

· Providing an example of at least one project that may have a negative NPV but be worth doing. For example, perhaps the company is posting monitors all over its office to provide employees weather, traffic, and news.

To learn more about capital budgeting decisions, you may wish to read the following journal articles: 

· Bennouna, K., Meredith, G. G., & Marchant, T. (2010).  Improved capital budgeting decision making: Evidence from Canada.  Management Decision, 48(2), 225–247.

· Hornstein, A. S., & Zhao, M. (2011).  Corporate capital budgeting decisions and information sharing.  Journal of Economics and Management Strategy, 20(4), 1135–1170.