Abstract
This study analyzes how Ito-Yokado invests in a new store from the standpoint of the management process research in capital budgeting. The purpose of the research is to illustrate the ringi process in which the company fine-tunes its profitability goals associated with the opening of a new store so that these goals become more achievable until such time as capital expenditures are determined; the onsite employees’ hypothesis-verification activities facilitated through the managerial accounting system are incorporated into a new store’s profit goals. The significance of this study is that it has suggested an investment process for a new store based on the hypothesis-verification model that fine-tunes a plan for the new store until such time as capital expenditures are determined.
