1. What is opportunity cost and why is it an important concept in the capital budgeting process? The opportunity cost concept applies to almost every financial decision we make as individuals. Can you give an example from your own experience?

2. What is capital rationing from the perspective of capital budgeting?

3. Give an example of a strength and a weakness of the accounting rate of return approach.

Visit the following website:

http://www.ancient.eu/article/294/ (Links to an external site.)

What to do:

Explore the website and then write approximately 300 words about a subject that you found to be of interest and why.