Formulation of cash flows

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-Identify the steps to the process such as the formulation of cash flows, the development of the cost of capital (i.e., weighted average cost of capital), and the calculation of decision metrics, including the net present value and the internal rate of return.

-Utilize the analysis to predict project success/failure in terms of shareholder wealth and other relevant factors. For example, if the net present value of a project is positive, then the project should be undertaken and the expected result will be that shareholder wealth will increase upon the announcement and execution of the project.

-Discuss how each of these two types of decision methods are different and form numerical examples to make your points.

-Place special emphasis on how a new project analysis differs from a replacement project.

Reference no: EM132788258

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