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The Basics of Financing a Business

   

Added on  2022-08-23

17 Pages689 Words17 Views
BUSINESS FINANCE
The Basics of Financing a Business_1
CHARATERISTICS OF PROJECT EVALUATION
Single project assessment or assessment of
mutually exclusive projects.
Huge funds involved (Berman, Knight and
Case, 2013) .
Irreversible decisions (Bierman Jr, and Smidt,
2012) .
Resources involved: Technology, Manpower,
Time ansd Efforts.
The Basics of Financing a Business_2
PROJECT CHOICES
Choice 1: Introduction of a new product for
the low-end market.
Choice 2: Expansion of market for the
existing product.
Above projects are mutually exclusive
projects.
Selection of one option would lead to the
rejection of the other option.
The Basics of Financing a Business_3
METHODS OF EVALUATION
Cash Payback Period
Net Present Value
Internal Rate of Return
Profitability Index
Accounting Rate of Return
Discounted Cash Pay Back, and others.
The Basics of Financing a Business_4

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