Opportunity Cost of Capital – Concept, Example, and Consideration
A financial cost of capital, in simple words, is the average cost of financing the current projects. And this cost of capital is always… Read Article
Capital Budgeting
Estimation of Project Cost
What is Project Cost?Estimation of Project Cost is a very important step in project planning, evaluation of various opportunities, and prioritizing them. Or selecting… Read Article
Crossover Rate – Meaning, Formula, Example, and More
Crossover Rate is a crucial tool in capital budgeting. It primarily allows management to analyze the two mutually exclusive projects together and then decide… Read Article
Types of Real Options in Capital Budgeting – All You Need to Know
In capital budgeting, one may use any among the various methods: NPV or IRR vs PBP vs PI. It is to decide about the… Read Article
Decision Tree Analysis – Meaning, Example, Steps, and More
A Decision Tree is a graphical chart and tool to help people make better decisions. It is a risk analysis method. Basically, it is… Read Article
Strategic Options
What is the Meaning of Strategic Options?A strategy is a plan for the successful achievement of the organization’s goals over a period of time.… Read Article
Abandonment Option – Meaning, Importance, and More
Abandonment or termination option is an optional clause in a contract or an agreement. This option allows either party to cease or abandon the… Read Article
Brownfield Investment
What is a Brownfield Investment?A Foreign Direct Investment (FDI) is a cross-border investment. In FDI, an investor- an individual or a firm- invests in… Read Article
Key Man Clause – Meaning, Importance, How to Implement and More
Key Man Clause is a contractual term that protects the lender or investor. The presence of such a clause prevents a company from making… Read Article
Value Additivity: Meaning, Uses of the Principle, Limitations and More
Value Additivity: MeaningThe Value Additivity Principle is a financial principle that says that the total value of a group of assets is equal to… Read Article
Greenfield Investment Strategy – Meaning, Advantages, Disadvantages, and Examples
Greenfield Investment Strategy: MeaningA greenfield project is where the entire project has to start from scratch. And everything from planning to implementation is new.… Read Article