Capital investment analysis methods
Free IMA CMA Part 2 (Strategic Financial Management) lesson in Capital Investment Decisions. 12 min read, ~1,866 words.
NPV discounts all project cash flows at the cost of capital and accepts projects where NPV 0. The decision criterion that maximizes shareholder wealth. IRR solves for the discount rate that makes NPV = 0 and accepts projects where IRR cost of capital (hurdle rate). Independent projects: accept all with...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- 2E2
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