{"product_id":"2940012093479","title":"Capital Budgeting Tutorial","description":"One of the most important tasks in corporate finance is the allocation of capital resources.  A company’s ability to create value for its shareholders will ultimately be a function of its ability to invest capital in business opportunities that yield returns in excess of the cost of capital.  The goal of this tutorial is to give the reader the quantitative tools needed to properly evaluate capital budgeting opportunities for the purpose of maximizing the value of the firm.  \u003cbr\u003e\u003cbr\u003eLearning Objectives\u003cbr\u003e\u003cbr\u003eThe first part of this tutorial will be devoted to a discussion of the Free Cash Flow approach to quantifying capital budgeting decisions.  The two major components of Free Cash Flow, consisting of net operating profit after taxes (NOPAT) and capital invested, will be defined and their use in quantifying the capital budgeting opportunity will be discussed.  In addition, the use of the weighted average cost of capital as a discounting mechanism will be illustrated.  \u003cbr\u003e\u003cbr\u003eIn the second part of the tutorial, the Economic Profit approach to quantifying capital budgeting decisions will be discussed.  The similarities and differences between the Economic Profit approach and the Free Cash Flow approach will be shown, as well as the equivalence between these two metrics with respect to net present value. \u003cbr\u003e\u003cbr\u003eThe third part of the tutorial will be devoted to a discussion of a capital budgeting project’s terminal value.  The terminal value of a project will be defined, and two simplified quantitative approaches to developing terminal value will be presented. \u003cbr\u003e\u003cbr\u003eThe fourth part of the tutorial will present the various qualitative issues to be addressed in capital budgeting analysis.  This will specifically include incremental flow analysis, the impact of incidental effects, the need to capture all investment requirements, and the adoption of the appropriate cost of capital.\u003cbr\u003e\u003cbr\u003eThe final section of the tutorial will address “strategic investments” which are those that are potentially net present value positive on an overall basis, but which show particularly negative results during their early to middle years.","brand":"Richard Malekian","offers":[{"title":"Default Title","offer_id":46563737010417,"sku":"2940012093479","price":6.99,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0674\/5433\/7265\/files\/2940012093479_p0.jpg?v=1765572023","url":"https:\/\/shop.barnesandnoble.com\/products\/2940012093479","provider":"Barnes \u0026 Noble","version":"1.0","type":"link"}