Capital Budgeting Methods

Activity Context

This discussion helps you develop the skills to master the following course competencies:

· Integrate financial analyses into general business management planning and decision making.

Activity Instruction

Discuss the various capital budgeting methods such as net present value (NPV), internal rate of return (IRR), and so on, and explain how they differ from one another. Identify which, if any, of the methods discussed might be superior to the others and explain why. If you were a financial manager, which method would you prefer and why?

Support your post as appropriate with the theories presented in this week’s required reading.

Required Readings

Use your Corporate Finance: Core Principles and Applications textbook to read the following:

· Chapter 7, “Net Present Value and Other Investment Rules.”

· Chapter 8, “Making Capital Investment Decisions.”

· Chapter 9, “Risk Analysis, Real Options, and Capital Budgeting.”

Required Textbooks/eBooks

Ross, S. A., Westerfield, R. W., Jaffe, J. F., & Jordan, B. D. (2018). Corporate finance: Core principles and applications (5th ed.). New York, NY: McGraw-Hill.

Use the University Library to read: see attachment.

· Keršytė—, A. (2011). Capital budgeting process: theoretical aspectsEconomics & Management16, 1130–1134.

· Turner, J. A. (2016). Net operating working capital, capital budgeting, and cash budgets: A teaching exampleAmerican Journal of Business Education9(1), 15–21.

Multimedia

Resources

Discussion Participation Scoring Guide.

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