Written by authors of established texts in this area, this book is a companion volume to the classic The Capital Budgeting Decision. Exploring this key topic in corporate finance the authors examine the complexities of capital budgeting as well as the opportunities to improve the decision process where risk and time are important elements.
Containing ‘Global Aspects’ sections that cover cross-border decision-making, this book also emphasizes the application of capital budgeting techniques to a variety of issues, including the hugely significant ‘buy versus lease’ decision that cost corporations billions each year.
It gives in-depth coverage to:
Designed to assist those making business decisions at all levels, this volume is essential reading for all those working in or studying capital budgeting.
Part 1: Capital Budgeting and Valuation Under Certainty 1. The State of the Art of Capital Budgeting 2. Amounts Discounted and Discount Rates Part 2: Capital Budgeting and Valuation Under Uncertainty 3: Capital Budgeting with Uncertainty 4: Elements of Time and Uncertainty 5. The State Preference Approach 6. Resolution of Uncertainty 7. Diversification and Risk Reduction 8. Projects with Components Having Different Risks 9. Practical Solutions to Capital Budgeting with Uncertainty Part 3: Option Theory as a Capital Budgeting Tool 10. Real Options and Capital Budgeting Part 4: Applications of Capital Budgeting 11. Growth Constraints 12. The Valuation of a Firm 13. Using Economic Income (Residual Income) for Valuation 14. Present-Value Accounting 15. Performance Measurement and Managerial Compensation 16: Fluctuating Rates of Output 17. Investment Decisions with Additional Information 18. Investment Timing 19. Buy versus Lease