Abstract
Thinking about whether to go to college, deciding whether to buy a company or choosing between two machine tools: these are all investment decisions. You try to make the best decision: the one that is most profitable for the company or for yourself. When choosing investments, we rely on decision-making criteria (not too difficult) and on a forecast of future cash flows (a little more complicated …). In Chapter 1 we saw how to analyse a company’s financial statements and we ended with cash flows—the lifeblood of the company. We will now use this knowledge to make cash flow forecasts. In Chapter 2 we suffered through a few financial calculations, including discounting. We will make use of this knowledge in our decision-making criteria.
You must lose a fly to catch a trout.
George Herbert (1593–1633)
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Author information
Authors and Affiliations
Copyright information
© 2015 Christophe Thibierge and Andrew Beresford
About this chapter
Cite this chapter
Thibierge, C., Beresford, A. (2015). Capital Budgeting. In: A Practical Guide to Corporate Finance. Palgrave Macmillan, London. https://doi.org/10.1057/9781137492548_4
Download citation
DOI: https://doi.org/10.1057/9781137492548_4
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-55265-8
Online ISBN: 978-1-137-49254-8
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)