January 2024
Intermediate to advanced
720 pages
17h 20m
English
Since we are dealing with expectations, predictions, and projections of future performance, capital investment decisions have an inherent level of risk and uncertainty. The risk and uncertainty can be extreme in projects that extend over a long period, or involve rapidly changing environmental and competitive factors (almost all markets now!). In recent years, the pace of change, level of uncertainty, and frequency of black swan events have exacerbated business risks.
There are two broad techniques for addressing risk and uncertainty in capital investment decisions:
Utilization of an Appropriate Discount Rate for the Project Risk Many firms use a single discount rate for all ...