Capital budgeting valuation : financial analysis for today's investment projects

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Bibliographic Information

Capital budgeting valuation : financial analysis for today's investment projects

H. Kent Baker and Philip English

(The Robert W. Kolb series in finance)

Wiley, c2011

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Includes bibliographical references and index

Description and Table of Contents

Description

An essential guide to valuation techniques and financial analysis With the collapse of the economy and financial systems, many institutions are reevaluating what they are willing to spend money on. Project valuation is key to both cost effectiveness measures and shareholder value. The purpose of this book is to provide a comprehensive examination of critical capital budgeting topics. Coverage extends from discussing basic concepts, principles, and techniques to their application to increasingly complex, real-world situations. Throughout, the book emphasizes how financially sound capital budgeting facilitates the process of value creation and discusses why various theories make sense and how firms can use them to solve problems and create wealth. Offers a strategic focus on the application of various techniques and approaches related to a firm's overall strategy Provides coverage of international topics based on the premise that managers should view business from a global perspective Emphasizes the importance of using real options Comprised of contributed chapters from both experienced professionals and academics, Capital Budgeting Valuation offers a variety of perspectives and a rich interplay of ideas related to this important financial discipline.

Table of Contents

Acknowledgments ix 1 Capital Budgeting: An Overview 1 H. Kent Baker and Philip English Part I Foundation and Key Concepts 17 2 Corporate Strategy and Investment Decisions 19 Daniel Ferreira 3 Corporate Governance and Investment Decisions 37 Fodil Adjaoud, Dorra Charfi, and Lamia Chourou Part II Capital Investment Choice 57 4 Measuring Investment Value: Free Cash Flow, Net Present Value, and Economic Value Added 59 Tom Arnold and Terry Nixon 5 Alternative Methods of Evaluating Capital Investments 79 Tom Arnold and Terry Nixon 6 Capital Rationing for Capital Budgeting 95 Alexander Bruggen 7 Analyzing Foreign Investments 111 Wim Westerman and John Henry Hall 8 Postcompletion Auditing of Capital Investments 131 Jari Huikku 9 Capital Budgeting Techniques in Practice: U.S. Survey Evidence 151 Tarun K. Mukherjee and Naseem M. Al Rahahleh Part III Project Cash Flows and Inflation 173 10 Estimating Project Cash Flows 175 Kyle Meyer and Halil Kiymaz 11 Capital Budgeting and Inflation 197 Ignacio Velez-Pareja and Joseph Tham Part IV Risk and Investment Choice 215 12 Basic Risk Adjustment Techniques in Capital Budgeting 217 John H. Hall and Wim Westerman 13 Capital Budgeting with Political/Country Risk 241 Yacine Belghitar and Ephraim Clark 14 Risk Management in Project Finance 259 Stefano Gatti and Stefano Caselli 15 Risk Simulation Concepts and Methods 279 Tom Arnold and David North Part V Real Options and Project Analysis 299 16 Real Options Analysis: An Introduction 301 Tom Arnold and Bonnie Buchanan 17 Applications of Real Options Analysis 321 Tom Arnold and Bonnie Buchanan Part VI Estimating the Project Cost of Capital 337 18 Cost of Capital: An Introduction 339 Octavian Ionici, Kenneth Small, and Frank D'Souza 19 Using the Capital Asset Pricing Model and Arbitrage Pricing Theory in Capital Budgeting 363 S. David Young and Samir Saadi 20 Financing Mix and Project Valuation: Alternative Methods and Possible Adjustments 381 Alex Pierru and Denis Babusiaux Part VII Special Topics 403 21 Capital Budgeting for Government Entities 405 Davina F. Jacobs 22 Decision Making Using Behavioral Finance for Capital Budgeting 421 Yuri Biondi and Giuseppe Marzo 23 Merger and Acquisition Pricing: The Valuation of Synergy 445 Rainer Lenz 24 Multicriteria Analysis for Capital Budgeting 463 Fernando R. Fernholz Answers to Discussion Questions 483 Index 507

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