Capital Budgeting: Theory and Practice

About the Authors.

Preface.

SECTION I: MAKING INVESTMENT DECISIONS.

The Investment Problem and Capital Budgeting.

Cash Flow Estimation.

Integrative Examples and Cash Flow Estimation in Practice.

SECTION II: CAPITAL BUDGETING EVALUATION TECHNIQUES.

Payback and Discounted Payback Period Techniques.

Net Present Value Technique.

Profitability Index Technique.

Internal Rate of Return Technique.

Modified Internal Rate of Return Technique.

Comparing Evaluation Techniques and Some Concluding Thoughts.

SECTION III: CAPITAL BUDGETING AND RISK.

Measurement of Project Risk.

Incorporating Risk in the Capital Budgeting Decision.

SECTION IV: ANALYZING THE LEASE VERSUS BORROW-TO-BUY PROBLEM.

Valuing a Lease.

Uncertainty and the Lease Valuation Model.

Generalization of the Lease Valuation Model.

Appendix: The Fundamental of Equipment Leasing.

Index.