How Does Your Garden Grow? Capital Budgeting in Action
UrbanStems is a young company very focused on growing their revenues and margins. Whether they are raising capital from investors or evaluating where to make their next significant investment, they face decisions about whether to invest in marketing (a perennial favorite, as it generates revenue directly) or in Information Technology (which may be less glamorous, but over time can lead to higher margins and lower labor costs on the supply chain side of the business).
What factors should UrbanStems consider regarding acceptance or rejection of new projects? Should they invest in marketing or technology?