Capital budgeting model, Financial Management

Develop a scenario for the future growth of the firm e.g. through using a SWOT analysis to identify an appropriate outcome (this will be covered in lectures)

• If it is to grow organically, identify the market opportunities for growth.

• If it is to grow by acquisition, identify the potential take-over target(s) and justify the choice.

• If it is to expand overseas, identify a possible joint venture partner in the country targeted.

• If it is to be acquired, clearly identify the reasons why, and the potential acquirer.

• Include analyses of the factors contributing to the decision, including any options discarded. 

Support the strategy

• Provide a capital budgeting model that demonstrates the financial business case for the chosen strategy. (Use a time period longer than 3 years for this model).

• Include equity or debt raising as necessary to finance the recommended strategy. The spreadsheets provided on the Damodaran web site may help (see above). If the firm has sufficient internal resources to fund the strategy, they must be clearly identified.

• Pay attention to the impact of the strategy on capital structure, gearing ratios, dividend payouts, any liquidity concerns, management strengths and weaknesses, etc.

  • Describe the characteristics of the financial facilities to be used for any funds raised.
  • Include management of financial risks as necessary.
  • Provide a financial profile of the firm after the growth strategy is complete i.e.

extend the Excel spreadsheet used in Step 3 forward by 3 years using the ratios calculated previously, (see Gitman et al., Chapter 3 for an example of how to do this) and then add the data from the first 3 years of the capital budgeting model.

Posted Date: 3/1/2013 12:31:19 AM | Location : United States







Related Discussions:- Capital budgeting model, Assignment Help, Ask Question on Capital budgeting model, Get Answer, Expert's Help, Capital budgeting model Discussions

Write discussion on Capital budgeting model
Your posts are moderated
Related Questions
Can a corporation have too much working capital?  Explain. A firm can have in excess of working capital if it is losing the opportunity to invest in high returning fixed assets

Size of the business / scale of the operation : the working capital requirement of the concern are directly influence the by the size of the business which may be measured in the

Lakespring Retirement Village is home to senior citizens who are fairly independent but need assistance with basic health care and occasional meals. Jill Thompson, a licensed beaut

Foreign Exchange Rates The proportional value of one currency to other, used to exchange currency from one denomination to another.  For example, one British pound is wort

Define operating cycle and long and short operating cycle? Use of operating cycle? Can someone give me assistance on these questions??

explain for factors influencing design for dividend policies

1. UN Number is a four digit number assigned to a potentially hazardous material (such as gasoline) or class of materials like corrosive liquids. 2. UN Numbers are assigned by U

Hedge Funds: Hedge Funds are investment partnerships that strive for above average returns through active portfolio management and whose primary compensation is a percentage of

Define why we measure a project’s risk as the change in the CV. We calculate a project’s risk as the change in the coefficient of variation since this focuses on the change in

Enumerate about the Turnkey operations An illustration of a turnkey business would be a franchise for example immediate brand, systems and product with exclusive territory. A t