Investment Decisions
Investment decisions, or capital budgeting, form a core function of corporate finance. Companies have to make judgments about how viable an investment opportunity is as well as its expected returns. The techniques of NPV and IRR are used for determining the contribution of an investment positively to the value of a company. NPV calculates the difference in terms of the current value for inflows versus outflows in cash, and IRR refers to that discounting rate at which the investment NPV would be equal to zero. These kinds of choices will allow organizations to screen investments based on strategic organizational priorities.
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Investment decisions, or capital budgeting, form a core function of corporate finance. Companies have to make judgments about how viable an investment opportunity is as well as its expected returns. The techniques of NPV and IRR are used for determining the contribution of an investment positively to the value of a company. NPV calculates the difference in terms of the current value for inflows versus outflows in cash, and IRR refers to that discounting rate at which the investment NPV would be equal to zero. These kinds of choices will allow organizations to screen investments based on strategic organizational priorities.
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10:46 AM - Dec 28, 2024 (UTC)
