Answer to Question #229454 in Management for Pabi

Question

Kabelo and Hendrik are joint owners of Fitness Gym. They are currently investigating the option 

of investing in cryotherapy, a cold therapy that may reduce inflammation in tendons or joints. 

Their investment would provide Fitness Gym members with equipment which may be used to 

reduce post-exercise recovery times, at an additional cost. The addition of cryotherapy to the 

gym represents a strategic service for Fitness Gym. Which one of the following statements 

reflects the importance of capital-investment projects such as the example above? 

1 The relative magnitude of the amounts involved. 

2 The short-term nature of capital-investment decisions. 

3 The operational nature of capital-investment projects. 

4 The direct effect of the time value of money on capital-investment projects.

Answer 1

3 The operational nature of capital-investment projects.