This report examines capital budgeting techniques and their application in corporate decision-making. It begins with an introduction to the importance of effective decision-making in organizations, emphasizing the impact of both good and bad decisions. The report then delves into capital budgeting, discussing its role in investment decisions, calculation of expenses and investments, and the evaluation of project potential. Various methods like DCF analysis, NPV, IRR, and payback period are explained. Following this, the report explores sensitivity analysis, scenario analysis, break-even analysis, and simulation analysis in detail, explaining their methodologies, applications, and importance in assessing risks and making informed financial decisions. It also discusses the limitations of capital budgeting tools and concludes by summarizing the key takeaways and references.
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