Important portion of determining this information. For Amazon,

Important factors for capital budgeting decisionCapital budgeting is a process of appraising investments to determine if they are economically good decisions to undergo for the organization. Of course, the amount of money needed is a large portion of determining this information. For Amazon, considering a new customer order and delivery system at 10% of the previous last year’s profits, Amazon would look at spending $420,000,000 on a new computer network system (Amazon, 2016). According to their annual report, Amazon clearly identifies the factors considered when looking at an investment, “Factors considered include quoted market prices; recent financial results and operating trends; implied values from any recent transactions or offers of investee securities; credit quality of debt instrument issuers; other publicly available information that may affect the value of our investments; duration and severity of the decline in value; and our strategy and intentions for holding the investment” (pg 47).  Significance of these factorsConsidering these factors would be important for Amazon because they will be at the top of reliability game. We want that business and retaining it by providing not only good service, but quick, efficient, and dependable service is what shall set us apart from the competition.Summary of important criteriaEvery time, an organization makes a promise to deliver, they are putting the company’s reputation on light (Varshney & Maheshwari 2010). Living up to expectations set is an important component of doing business. Consumers wants their products and in a timely fashion, retaining that business is important to the success of the company. How reliable are we in the time of eventualities?CalculationFor the Net Present value, the calculation will be the difference between the current cash value of inflows and the current cash value of outflows to analyze profits.NPV= C*{(1-(1+R)-T)/R}-Initial InvestmentFor instance NPV= {$10000/(1+0.12)1}+ {27000/(1+0.12)2}+ {$19000/ (1+0.12)3}- 35000NPV would remain at 8977.