This book explains the financial appraisal of capital budgeting projects. The coverage extends from the development of basic concepts, principles and techniques to the application of them in increasingly complex and real-world situations. Identification and estimation (including forecasting) of cash flows, project appraisal formulae, and the application of net present value (NPV), internal rate of return (IRR) and other project evaluation criteria are illustrated with a variety of calculation examples. Risk analysis is extensively covered by the use of risk adjusted discount rate, certainty equivalent, sensitivity, simulation and Monte Carlo analysis. The NPV and IRR models are further applied to forestry, property and international investments. Resource constraints are introduced to the capital budgeting decisions with a variety of worked examples using linear programming technique. All calculations are extensively supported by Excel workbooks on the Web, and each chapter is well reviewed by end of chapter questions.

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Yes, you can access Capital Budgeting by Don Dayananda,Richard Irons,Steve Harrison,John Herbohn,Patrick Rowland in PDF and/or ePUB format, as well as other popular books in Business & Finance. We have over one million books available in our catalogue for you to explore.

Information

Publisher

Cambridge University Press

Year

Print ISBN

eBook ISBN

Topic

Subtopic

Index

An

overview

5

Corporate 

goal

Strategic 

planning

Investment 

opportunities

Preliminary 

screening

Financial 

appraisal,

quantitative 

analysis,

project 

evaluation 

or

project 

analysis

Qualitative 

factors, 

judgements 

and

gut

feelings

Accept /reject 

decisions 

on

the

projects

Accept

Reject

Implementation

Facilitation, 

monitoring,

control 

and

review

Continue,

expand 

or

abandon 

project

Post-implementation 

audit

Figure

1.2.

The

capital

budgeting

process.

projects

should

be

analysed

by

taking

into

account

the

cash

ﬂow

interactions

of

all

the

projects.

The

capital

budgeting

process

Capital

budgeting

is

a

multi-faceted

activity.

There

are

several

sequential

stages

in

the

process.

For

typical

investment

proposals

of

a

large

corporation,

the

distinctive

stages

in

the

capital

budgeting

process

are

depicted,

in

the

form

of

a

highly

simpliﬁed

ﬂow

chart,

in

Figure

1.2.

Strategic

planning

A

strategic

plan

is

the

grand

design

of

the

ﬁrm

and

clearly

identiﬁes

the

business

the

ﬁrm

is

in

and

where

it

intends

to

position

itself

in

the

future.

Strategic

planning

translates

the

ﬁrm’s

corporate

goal

into

speciﬁc

policies

and

directions,

sets

priorities,

speciﬁes

the

structural,

Cover
Half-title
Title
Copyright
Contents
Figures
Tables
Preface
1 Capital budgeting: an overview
2 Project cash flows
3 Forecasting cash flows: quantitative techniques and routes
4 Forecasting cash flows: qualitative or judgemental techniques
5 Essential formulae in project appraisal
6 Project analysis under certainty
7 Project analysis under risk
8 Sensitivity and break-even analysis
9 Simulation concepts and methods
10 Case study in financial modelling and simulation of a forestry investment
11 Resource constraints and linear programming
12 More advanced linear programming concepts and methods
13 Financial modelling case study in forestry project evaluation
14 Property investment analysis
15 Forecasting and analysing risks in property investments
16 Multinational corporations and international project appraisal
References
Index

About this book

Frequently asked questions

Information

Table of contents