This process includes determining capital needs, exploring resource limitations, establishing baseline criteria for alternatives, evaluating alternatives using screening and preference decisions, and making the decision Screening decisions help eliminate undesirable alternatives that may waste time and money.

Preference decisions rank alternatives emerging from the screening process to help make the final decision. Capital investment decisions select a project for future business development.

preference decision — process of comparing potential projects that meet screening decision criteria, and will rank order of importance, feasibility, and desirability to differentiate among alternatives. screening decision — process of removing alternatives from the decision-making process that would be less desirable to pursue given their inability to meet basic standards. capital investment — company’s contribution of funds toward long-term assets for further growth; also called capital budgeting. alternatives — options available for investment.