(205)---REPLACEMENT OF AN EXISTING ASSET

Replacement of an Existing Asset We have discussed in our previous posts the method of constant replication or replacement chains to choose...

(204)---TREE HARVESTING PROBLEM IN INVESTMENT

Tree Harvesting Problem in Investment The optimum investment timing analysis is of direct relevance in the case of tree harvesting problems...

(203)---INVESTMENT TIMING AND DURATION

Investment Timing and Duration A firm evaluates a number of investment projects every year. In the absence of a capital constraint, it will...

(202)---PROJECTS WITH DIFFERENT LIVES

Projects with Different Lives The correct way of choosing between mutually exclusive projects with the same lives is to compare their net pr...

(201)---COMPLEX INVESTMENT DECISIONS

Complex Investment Decisions The simple accept or reject investment decisions with conventional cash flows may not be quite common in pract...

(200)---IMPORTANT POINTS ABOUT CASH FLOW CALCULATION

Important Points about Cash Flow Calculation Free cash flows and the discount rate Free cash flows are available to service both the share...

(199)---CASH FLOW CALCULATION

Important Points about Cash Flow Calculation The estimation of cash flows, through difficult, is the most crucial step in investment analys...

(198)---FINANCING EFFECTS IN INVESTMENT EVALUATON

Financing Effects in Investment Evaluation In our discussion so far, we have ignored the question of financing an investment projects in th...

(197)---NOMINAL VS. REAL RATES OF RETURNS

Nominal vs. Real Rates of Returns How should the rate of inflation be taken into account in the capital budgeting decisions? We should be ...

(196)---INVESTMENT DECISIONS UNDER INFLATION

Investment Decisions under Inflation A common problem, which complicates the practical investment decision-making, is inflation. The rule o...