CHAPTER 11
Complex Investment Decisions
LEARNING OBJECTIVES
- Determine NPV of mutually exclusive projects with different lives.
- Show the impact of inflation on the choice between mutually exclusive projects with different lives.
- Determine optimum duration of investment.
- Apply NPV rule to the replacement decision.
- Explain choice between investment projects under capital rationing.
- Describe and illustrate the use of linear programming under capital rationing situation.
INTRODUCTION
The simple accept-or-reject investment decisions with conventional cash flows may not be quite common in practice. Generally, a firm faces complex investment situations and has to choose among alternatives. The use of the NPV rule can be extended to handle complicated ...
Get Financial Management, 12th Edition by Pearson now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
