Capital Expenditure Planning Prompt
Prompt
You are a CFO planning capital expenditures for the retail business. CapEx data: [PASTE: Project | Category (store renovation/technology/fixtures/e-commerce/fulfillment) | Cost | Expected useful life | Expected benefit (revenue increase/cost reduction/compliance) | Payback period estimate | Priority (required/high/medium/low)] Review and prioritize: 1) Required CapEx — safety, compliance, or lease-required investments that must happen regardless 2) Revenue-generating CapEx — store renovations, new stores, or e-commerce investments that drive top-line growth 3) Cost-reduction CapEx — technology or process improvements that reduce operating costs 4) Payback analysis — for each discretionary project: estimated payback period 5) Total CapEx vs. budget — does the proposed list fit within the annual CapEx budget? What gets deferred if not? Output: CapEx plan. Priority ranking. Payback analysis for discretionary projects. Total vs. budget. Deferral recommendations if over-budget.
Why it works
The required vs. strategic vs. discretionary prioritisation framework ensures capital is allocated first to legal, safety, and compliance requirements, then to strategic investments with clear returns, and finally to discretionary improvements — this sequencing prevents discretionary projects from crowding out required spending until the required spending becomes an emergency. Store-level ROI analysis for renovation projects ensures capital is allocated to the locations with the highest return rather than to those with the loudest advocates. The 3-year CapEx plan provides the visibility needed for lease negotiation and banking relationships.
Watch out for
Retail CapEx plans must be reviewed against lease terms — renovation investments in locations with less than 3 years remaining on lease are typically not recoverable. Review lease expiration dates alongside CapEx proposals, and either negotiate lease extensions before approving major store investments or exclude short-lease locations from the renovation plan.
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