Response to the following problem:
You Decide: Which measurement is more important when making a capital budgeting decision, net present value or improved customer satisfaction?
Your company is considering purchasing a server to host the company Web site, which customers use to place their orders. When deciding on this new capital investment, you realize that the net present value of the purchase is negative, meaning the future cash flows associated with the server will not replace the initial investment. However, an important qualitative factor that should be considered with the purchase of a new server is the improved customer service and satisfaction that will be achieved as a result of the purchase. What should you do?