The major contribution of this paper is to provide a synthesis of the capital budgeting problems when dealing with advanced automation projects. First, we identify and formexpectationsof the future cash flows while paying particular attention to the indirect, non-pecuniary effects. Second we use tools from modern finance-theory, such as the Capital Asset Pricing Model, to evaluate the riskiness of the component cash flows and arrive at a set of appropriate discount-rates. This prescription is intended to reduce managerial subjectivity in the decision to invest in such projects.