Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 17 November 1993
Revision date: 9-Apr-2019
Length: 7 pages
Data source: Published sources
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Abstract
This is a Spanish version. A set of five exercises in capital budgeting. Student calculates and compares various decision criteria (including IRR and NPV) for capital investment projects. This is an introductory case, where relevant cash flows are provided, and the focus is on the discounting mechanics and the decision to invest. In addition, one exercise directly probes the link between positive NPV projects, and value added to the shareholders. The final 'exercise' is a three page mini-case analyzing Lockheed's decision to invest in the TriStar L-1011 Airbus project. This drives home the importance of discounting and NPV, and shows the adverse effect of a negative NPV project on shareholder value.
Industries:
Size:
USD500 billion market capitalization
Other setting(s):
1968-1973
About
Abstract
This is a Spanish version. A set of five exercises in capital budgeting. Student calculates and compares various decision criteria (including IRR and NPV) for capital investment projects. This is an introductory case, where relevant cash flows are provided, and the focus is on the discounting mechanics and the decision to invest. In addition, one exercise directly probes the link between positive NPV projects, and value added to the shareholders. The final 'exercise' is a three page mini-case analyzing Lockheed's decision to invest in the TriStar L-1011 Airbus project. This drives home the importance of discounting and NPV, and shows the adverse effect of a negative NPV project on shareholder value.
Settings
Industries:
Size:
USD500 billion market capitalization
Other setting(s):
1968-1973