The capital budgeting decision techniques that weve discussed all have strengths and weaknesses, but they do comprise

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The capital budgeting decision techniques that we’ve discussed all have strengths and weaknesses, but they do comprise the most popular rules for valuing projects. Valuing entire businesses, on the other hand, requires that some adjustments be made to various pieces of these methodologies. For example, one alternative to NPV used quite frequently for valuing firms is called Adjusted Present Value (APV).

To explore these alternative decision rules, do a Web search for APV and answer the following questions:

1. What is APV, and how does it differ from NPV?

2. What other business valuation models seem to be popular?


Capital Budgeting
Capital budgeting is a practice or method of analyzing investment decisions in capital expenditure, which is incurred at a point of time but benefits are yielded in future usually after one year or more, and incurred to obtain or improve the...
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Finance Applications and Theory

ISBN: 978-0077861681

3rd edition

Authors: Marcia Cornett, Troy Adair

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