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Capita Capital Investment Essay

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When it comes to making capital investment decisions, typically only top level management is involved. Basically, this would include chief executive officers, chief operating officers, chief financial officers, and other top-level employees. For a variety of reasons, capital investment decisions are more crucial than day-to-day decisions made by individuals and they are not the same as normal operational decisions made by operational managers. Based on the fact that they extend over long time periods and have long-term impacts on a company’s performance they are far more vital and necessitate greater participation. Therefore, more often than not, a strategic capital investment decision requires the investment of substantial capital of a long time period. Thus, the future financial standing and market value of the company is determined by the future cash flows receivable from the investment (Rubl, 1997). …show more content…

Therefore, it is vital that these decisions align with company standards since they can have a significant impact on the company’s brand image. Also, capital investment decisions entail a long-term commitment and cannot easily be reversed or terminated. For that reason, companies need and should desire upper-level management to review and evaluate all proposals before any decisions are made. Therefore, as a general measure of precaution, companies normally ensure that top executives have widespread and diverse associations outside the business. Furthermore, when a specific problem arises that requires expert knowledge or counsel, the services of services of engineering and financial organizations qualified to audit or guide their own thinking are called upon (Dennison,

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Considering that investment decisions can have a huge impact on the company, they should be made by executive management. Executive management positions like the CFO or a CEO of a company are more invested in the company. Further, with their position comes a certain level of expectation that they will drive the company to a positive future and made solid decisions. They are depended on by senior management for guidance on key initiatives, capital investments being on of these (Reeves, 2008). Overall, CFO and CEO’s are expected to be the “voice of reason” for the company.

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