Conceptual background for non-specialists

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Reference no: EM133110558

A new Chief Executive Officer, Joss Duwitt has been appointed to the board of Complex Solutions plc. , a large publicly listed corporation, owned by diversified investors,  that carries no debt.

You are the assistant to Joss who has tabled two items for the agenda of the next board meeting. 

  1. The appropriate discount (hurdle rate) to be set for the year for new investment projects by Complex solutions.
  2. Getting agreement on conflicting views between managers as to which methods of capital investment appraisal should be used.

Joss hopes for a well-informed debate at the board and has requested a concise, clearly worded and structured advisory report

For (1) you should deal with four sub-questions:

  1. Conceptual background for non-specialists
  2. The standard approach to risk used by financial specialists 
  3. Implementation including required data collection
  4. Reliability of any estimates

Question (2) provide information on NPV, IRR, Payback and Sensitivity analysis.

Thank you in advance and please explain in detail.

Reference no: EM133110558

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