Capital Budgeting_B2-207
This course is developed to equip students with the advanced
knowledge of capital budgeting in related to long-term financial decisions, as
well as how to analyze the projects with hidden real options and implement
project risk management using scenario analysis and Monte Carlo simulation.
Besides, this unit also provides an understanding of three alternative
approaches for capital budgeting for a levered firm. In particular, we describe
and discuss the adjusted present value (APV), the flow to equity (FTE), and the
weighted average cost of capital (WACC) approaches. Techniques of examining and making decision
on whether the firm should lease or should buy the assets are also presented
and discusssed. Throughout the course, students are expected to be able to
analyze the trade-off between returns and risks of capital investment decision
from the perspective of corporate shareholders to maximize the firm’s long-term
value