PPT-Chapter 9 Capital Budgeting Decision Models

Learning Objectives Explain capital budgeting and differentiate between shortterm and longterm budgeting decisions Explain the payback model and its two significant weaknesses and how the discounted payback period model addresses one of the problems. 180 181 Key Concepts and SkillsUnderstand the effects of leverage on the value created by a projectBe able to apply Adjusted Present Value (APV), the Flows to Equity (FTE) approach, and the WACC metho MODULE 2 Capital Budgeting is a project selection exercise performed by the business enterprise. Capital budgeting uses the concept Capital budgeting uses tools such value, internal rate of return NPV Analysis. The. recommended approach to any significant capital budgeting decision is NPV analysis.. NPV = PV of the incremental benefits – PV of the incremental costs.. When evaluating independent projects, take a project if and only if it has a positive NPV.. Gary Perdew. St. Lucie County Fire District. Overview. What is Budgeting?. Importance. Public . vs. Private . Policies. Budget Cycle. Language. Revenues. Fund Balance. Expenditures. Reports & Monitoring. MODULE 2 Capital Budgeting is a project selection exercise performed by the business enterprise. Capital budgeting uses the concept Capital budgeting uses tools such value, internal rate of return (. Eun. and . Resnick. chapter 18). Identify the . size. and . timing. of all relevant cash flows on a time line.. Identify the . riskiness. of the cash flows to determine the appropriate discount rate.. 1. Multinational Capital Budgeting. Extension of the domestic capital budgeting analysis to evaluate a Greenfield foreign project. Distinctions between the project viewpoint & the parent viewpoint when analyzing a potential foreign investment. Tom C. Nelson, PhD. Clicker Question. (4.0). Consider two business ventures with the following cash flows. Which should you invest in? Guess... Note: required return is 15%. Cash Flows. Venture. Andrew Blazey and Ana Maria Ruiz. Public . Governance . Directorate. 15th Annual Meeting of . OECD-CESEE . Senior Budget Officials. 4-5 . July . 2019. Minsk, Belarus. Budgeting and Public Expenditure Division. Capital . Budgeting. Capital . budgeting is the making of long-run. planning decisions for investments in. projects and programs.. It . is a decision-making and control tool that. focuses primarily on projects or programs. . October 6, 2003. David Hackworth. Industrial Engineering Deptartment. University of Pittsburgh. One Parent Company –. Three (3) Subsidiaries . Question: How to allocate limited Capital Budget $?. Dr. James Mathew. Long term Investment Decisions (Capital Budgeting Decisions). The investment decisions of a firm are generally known as capital budgeting or capital expenditure decisions.. Capital budgeting decision may be defined as the firm’s... Semester. Unit-6. Capital Expenditure Decisions-I. Prepared by RAJA PAUL. Capital Expenditure Decisions-I. Concept and Meaning:. Capital-Expenditure decisions or Capital Budgeting may be defined as the decision-making process by which firms... Nature/ Significance of Capital Budgeting Decisions. Purchase of a long-term capital assets with the objective to generate return. Involvement of huge funds. Irreversible. Long-term profitability/risk.