Capital Budgeting

For this one, we went back to business school: our guide explores the complexities and strategies of allocating limited resources effectively.

🔹 Capital as a Limited Resource: Understand the constraints of debt and equity, and the crucial role of management in resource allocation.

🔹 Basic Steps of Capital Budgeting: From estimating cash flows to determining the appropriate discount rate, learn the foundational steps.

🔹 Evaluation Techniques: Discover the nuances of Payback Period, Net Present Value (NPV), Internal Rate of Return (IRR), and more.

🔹 Project Decision Analysis: Grasp the importance of cash flows, incremental analysis, and risk assessment in project evaluation.

🔹 The Significance of the Cost of Capital: Delve into how the cost of capital influences investment decision-making and its impact on maximizing shareholder value.

🔹 Factors Influencing the Cost of Capital: Explore the dynamics of Weighted Average Cost of Capital (WACC) and its components.

🔹 Divisional Hurdle Rates and Breakpoints: Learn about tailored hurdle rates for different divisions and the concept of breakpoints in the WACC.

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The MIM Prep Team