A temporal model utilizing mixed integer programming was constructed to evaluate investment alternatives in combination with the present value method of capital budgeting. As such it is a first step beyond conventional linear and integer programming in developing relevant capital decision‐making models. The procedure permits the consideration of investment in discontinuous (lumpy) inputs which also are interdependent —thus overcomes some of the principle weaknesses of other capital budgeting procedures. The model was tested with a relatively simple five‐year model including land and machinery investment alternatives for a cash grain farm and proved capable of handling both the discontinuities and interrelationships. The possibilities of extending the model to include a greater range of alternatives and more complicated interrelationships such as reinvestment of intermediate cash throwoffs also was exp