Lecture 7: NPV in Project Decision Making

Business & Economics - Lecture 7: NPV in Project Decision Making - 15 slides

Explore Lecture 7: NPV in Project Decision Making, covering This lecture focuses on the application of Net Present Value (NPV) in evaluating capital projects, using case studies.

Topics Covered

  • Introduction to NPV in Evaluating Capital Projects
  • Key Variables in NPV Calculation
  • Understanding the Discount Rate
  • NPV Application: Evaluating Mutually Exclusive Projects
  • NPV in Risk-Weighted Project Analysis
  • Project Cannibalization and NPV
  • Practice Problem: Choosing Between Projects
  • NPV in Incremental Analysis for Expansion Projects
  • NPV in Evaluating Replacement Projects
  • Sensitivity Analysis in NPV Evaluations
  • NPV and Real Options Analysis in Capital Projects
  • Multi-Project Portfolio Optimization Using NPV
  • Integrating Non-Financial Factors into NPV Decision-Making
  • Evaluating NPV in Public Sector Capital Projects
  • Conclusion: Integrating NPV in Advanced Capital Project Decision-Making

References

  • Brealey, R.A., Myers, S.C. and Allen, F. (2020). Principles of Corporate Finance. 13th edn. New York: McGraw-Hill Education.
  • Ross, S.A., Westerfield, R.W. and Jaffe, J.F. (2019). Corporate Finance. 12th edn. New York: McGraw-Hill Education.
  • Damodaran, A. (2015). Applied Corporate Finance. 4th edn. Hoboken: Wiley.
  • Brealey, R.A., Myers, S.C., and Allen, F. (2020) Principles of Corporate Finance. 13th edn. New York: McGraw-Hill.
  • Kaplan, R.S. (1982) Advanced Management Accounting. Harvard Business School Press.
  • Damodaran, A. (2002) Investment Valuation. New York: Wiley Finance.
  • Ross, S.A., Westerfield, R.W., and Jaffe, J.F. (2019) Corporate Finance. 12th ed. McGraw-Hill.
  • Ross, S.A., Westerfield, R.W. and Jaffe, J. (2019) Corporate Finance. 12th edn. New York: McGraw-Hill Education.
  • Brealey, R.A., Myers, S.C. and Allen, F. (2020) Principles of Corporate Finance. 13th edn. Boston: McGraw-Hill Education.
  • Copeland, T.E. and Weston, J.F. (2004) Financial Theory and Corporate Policy. 3rd edn. Pearson Education.
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