Several questions in the committee arose concerning this capital acquisition decision: Would the investment increase the value of the firm? Would it earn at least the rate of return required by the company? How long would it take the firm to recover the invest- ment given the predicted savings? After dis- cussion and analysis, the committee concluded that the investment was justified based on the savings associated with the new system. Using the predicted savings, the committee presented headquarters with a formal net present value analysis showing that the welding system was economically superior to the epoxy system and an analysis confirming that the expected return was greater than the division�s cost of capital. Based on these analyses, headquarters approved the purchase of the new system.