Chapter5TheAnalysisofInvestmentProjects.pptVIP

Chapter 5: The Analysis of Investment Projects Chapter 5 Contents The Nature of Project Analysis Where Do Investment Ideas Come From? The NPV Rule Estimating a Project’s Cash Flow Cost of Capital Sensitivity Analysis Using Spreadsheets Analyzing Cost-Reduction Projects Projects with Different Lives Ranking Mutually Exclusive Projects Inflation and Capital Budgeting Capital Budget and Capital Budgeting In the chapter 4, we discussed how to apply discounted cash flow to analyze individual’s financial decisions. A business firm should often decide whether to invest in factories, machinery, ware