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Corporate Financial Management Assignment

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Added on  2020-03-23

Corporate Financial Management Assignment

   Added on 2020-03-23

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Corporate Financial Management
Corporate Financial Management Assignment_1
Table of ContentsIntroduction................................................................................................................................3Techniques of Risk Assessment.................................................................................................4Sensitivity Analysis................................................................................................................4Scenario Analysis...................................................................................................................6Break-Even Analysis..............................................................................................................7Simulation Techniques...........................................................................................................8Conclusion..................................................................................................................................9References..................................................................................................................................9
Corporate Financial Management Assignment_2
IntroductionThe term capital budgeting can be said to be a process identification and selection ofinvestments in various types of assets in either long term or short term. The process of capitalbudgeting is an ongoing process since a business organization is expected to makeinvestments continuously. There are five stages involved in the process of capital budgeting.These stages include Screening and selection of investments (Stage 1), Proposal of capitalbudgeting (Stage 2), Authorization and approval of budgeting process (Stage 3), Tracking theproject (Stage 4), and Post completion Audit (Stage 5) [ CITATION Pam02 \l 16393 \mHar072].There are various techniques through which the capital budgeting decisions are taken such asInternal Rate of Return technique and Net Present Value technique, which can be used tomake an evaluation of the project, i.e. whether to carry on with the project or not. The termInternal Rate of Return or simply IRR can be defined as a rate of discount on which the NetPresent Value or the NPV of project cash flows becomes zero [ CITATION Inv17 \l 16393 ].In other words, IRR can be said to be a metric which is often used for the measurement ofprofitability of various alternatives of potential investments. Net Present Value or NPV, on the other hand, can be defined as the present value of cashinflows minus the present value of cash outflows [ CITATION Inv171 \l 16393 \m Wil085].This is also used to evaluate the profitability from a given project. Thus, in this assignment, various techniques such as sensitivity analysis, scenario analysis,simulation techniques and break even analysis in relation to the techniques of capitalbudgeting have been analyzed.
Corporate Financial Management Assignment_3

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