FIN 300 Study Guide - Final Guide: Microsoft Powerpoint, Net Present Value
Document Summary
Fin 300 exam 1 (chapters 1,2,3,4,5,6,7,9,10 & 11) Capital budgeting the process of planning expenditures on assets with cash flows that are expected to extend beyond one year. Strategic business plan a long-run plan that outlines in broad terms the firm"s basic strategy for the next 5-10 years. Net present value (npv) a method of ranking investment proposals using the npv, which is equal to the present value of future n et cash flows, discounted at the cost of capital. Independent projects projects with cash flows that are not affected by the acceptance or non acceptance of other projects. Mutually exclusive projects a set of projects where only one can be accepted. Internal rate of return (irr) the discount rate that forces a project"s npv to equal zero. Multiple irrs the situation where a project has two or more irrs. Net present value profile a graph showing the relationship between a project"s npv and the firm"s cost of capital.
