Lecture 9: Advanced NPV Techniques

Business & Economics - Lecture 9: Advanced NPV Techniques - 11 slides

Explore Lecture 9: Advanced NPV Techniques, covering Lecture 9 of the NPV course introduces advanced techniques for NPV calculations, specifically focusing on sensitivity.

Topics Covered

• Introduction to Advanced NPV Techniques
• Core Concepts of Sensitivity Analysis
• Mathematical Framework for Sensitivity Analysis
• Scenario Analysis: Expanding the Boundaries of NPV
• Scenario Analysis Formula and Example
• Monte Carlo Simulations in NPV Studies
• Practical Applications of Sensitivity Analysis in NPV
• Limitations of Sensitivity and Scenario Analysis in NPV
• Integrating Monte Carlo Simulations with Advanced NPV Analysis
• Emerging Tools and Software for NPV Analysis
• Conclusion and Key Takeaways

References

• Brealey, R.A., Myers, S.C., and Allen, F. (2020) Principles of Corporate Finance. 13th edn. New York: McGraw Hill.
• Copeland, T., Koller, T., and Murrin, J. (2000) Valuation: Measuring and Managing the Value of Companies. New York: John Wiley & Sons.
• Kwok, Y.K., and Misra, D.P. (1997) ‘Risk analysis in capital investment’, Financial Management, 26(1), pp. 25–32.
• Damodaran, A. (2007) Strategic Risk Taking: A Framework for Risk Management. New York: Pearson Education.
• Hull, J. (2012) Risk Management and Financial Institutions. 3rd edn. Hoboken, NJ: Wiley.
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• Damodaran, A. (2007) Strategic Risk Taking: A Framework for Risk Management. New Jersey: Pearson Education.
• Brealey, R.A., Myers, S.C., and Allen, F. (2020) Principles of Corporate Finance. 13th edn. Boston: McGraw-Hill.
• Savage, S.L. (2009) The Flaw of Averages: Why We Underestimate Risk in the Face of Uncertainty. Hoboken: Wiley & Sons.
• Hertz, D.B. (1964) 'Risk analysis in capital investment', Harvard Business Review.
• Brealy, R.A., Myers, S.C., & Allen, F. (2020) Principles of Corporate Finance. 13th edn. New York: McGraw Hill Education.
• Hull, J.C. (2012) Risk Management and Financial Institutions. 4th edn. Wiley.
• Hastie, T., Tibshirani, R. & Friedman, J. (2009) The Elements of Statistical Learning: Data Mining, Inference, and Prediction. 2nd edn. Springer.
• Copeland, T., Koller, T. & Murrin, J. (2000) Valuation: Measuring and Managing the Value of Companies. 3rd edn. Wiley.