The Relationship Between Long‐Term Strategy and Capital Budgeting Available to Purchase

Decisions on capital investments at both the progam level and the specific asset level should be made in the context of the objectives of an organization as a whole. The addition of a new product line or the acquisition of a machine should not be decided simply on the basis of a direct cost/benefit analysis that is related to the program or the asset alone. Instead, the investment decision should be considered on the basis of the long‐term plans of the organization.