“CAPITAL BUDGETING INAIR-INDIA” PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF MANAGEMENT STUDIES. MUMBAI UNIVERSITY SUBMITTED BY: - Mr. VISHAL D. JADHAV M.M.S 09-11 (Finance) SUBMITTED TO: - AIR- INDIA LTD. UNDER THE GUIDANCE: - Mr. SHOBHAN A. TALAVDEKAR DECLARATION I HEREBY DECLARE THAT I HAVE COMPLETED THIS PROJECT ON “CAPITAL BUDGETING” IN THE ACADEMIC YEAR 2010-2011. THIS INFORMATION IS TRUE AND ORIGINAL TO
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Multinational Capital Budgeting International Financial Management Dr. A. DeMaskey Learning Objectives How does domestic capital budgeting differ from multinational capital budgeting? How do incremental cash flows differ from total project cash flows? What is the difference between foreign project cash flows and parent cash flows? How does APV analysis differ from NPV analysis? How is the capital budgeting analysis adjusted for the additional economic and political risks
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INTRODUCTION TO CAPITAL BUDGETING Overview 159 7.1 The NPV Rule for Judging Investments and Projects 159 7.2 The IRR Rule for Judging Investments 161 7.3 NPV or IRR‚ Which to Use? 162 7.4 The “Yes–No” Criterion: When Do IRR and NPV Give the Same Answer? 163 7.5 Do NPV and IRR Produce the Same Project Rankings? 164 7.6 Capital Budgeting Principle: Ignore Sunk Costs and Consider Only Marginal Cash Flows 168 7.7 Capital Budgeting Principle: Don’t Forget the Effects of Taxes—Sally and Dave’s
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9-204-109 REV: OCTOBER 23‚ 2006 MIHIR DESAI Globalizing the Cost of Capital and Capital Budgeting at AES In June 2003‚ Rob Venerus‚ director of the newly created Corporate Analysis & Planning group at The AES Corporation‚ thumbed through the five-inch stack of financial results from subsidiaries and considered the breadth and scale of AES. In the 12 years since it had gone public‚ AES had become a leading independent supplier of electricity in the world with more than $33 billion in assets
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Capital Budgeting Surveys: The Future is Now Richard M. Burns and Joe Walker This research is motivated by two major factors: (1) the over twenty year hiatus since the last thorough review ofthe capital budgeting survey literature‚ and (2) past appeals to the finance academic community by researchers to explore neglected areas ofthe capital budgeting process. In response‚ and using a four-stage capital budgeting process as a guide‚ the authors review the capital budgeting survey literature
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Prepared for The Journal of Applied Corporate Finance Vol. 15‚ No. 1‚ 2002 How do CFOs make capital budgeting and capital structure decisions?1 John R. Graham Associate Professor of Finance‚ Fuqua School of Business‚ Duke University‚ Durham‚ NC 27708 USA Campbell R. Harvey Professor of Finance‚ Fuqua School of Business‚ Duke University‚ Durham‚ NC 27708 USA National Bureau of Economic Research‚ Cambridge‚ MA 02912 USA March 8‚ 2002 1A longer and more detailed version of this paper is published
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and interest payments are guaranteed by the government. Alternatively‚ the second investment opportunity is a bond issued by small company and that bond also pays annual interest of 5%. Virtually all investors would buy the government bond the first is less risky while paying the same interest rate as the riskier second bond. Furthermore‚ in order to attract capital from investors‚ the small firm issuing the second bond must pay an interest rate higher than 5% that the government bond pays otherwise
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A SUMMARY OF CAPITAL BUDGETING TECHNIQUES E A G C EDIRISINGHE - FGS/02/25/01/2012/044 COURSE MBA 61043- CORPORATE FINANCE SECOND YEAR SEMESTER ONE – 2013 Master of Business Administration Faculty of Commerce and Management Studies University of Kelaniya Course Instructors : Dr.P.M.C. Thilkarathne Dr.D.K.Y. Abeyawardena Corporate Finance - MBA 61043 CAPITAL BUDGETING TECHNIQUES Faced with limited sources of capital‚ management should carefully decide whether a particular project
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GLOBALIZING THE COST OF CAPITAL AND CAPITAL BUDGETING AT AES 1. How would you evaluate the capital budgeting method used historically by AES? 2. If you implemented the methodology suggested by Venerus‚ what would be the range of discount rates one would use around the world? 3. Does this make sense as a way to do capital budgeting? 4. How big a value difference does this new approach make to the Pakistan project? 5. How do these cost of capital modifications translate into changed probabilities
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Capital budgeting is the process of evaluating and selecting long-term investments that are in line with the goal of investors’ wealth maximization. When a business makes a capital investment (assets such as equipment‚ building‚ land etc.) it incurs a cash outlay in the expectation of future benefits. The expected benefits generally extend beyond one year in the future. Out of different investment proposals available to a business‚ it has to choose a proposal that provides the best return and the
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