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