BUS 322 Lecture Notes - Lecture 2: Discounted Cash Flow, Discount Window, Cash Flow

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 322
• Professor: Mahmoudian Fereshteh

Document Summary

Investment decision: long term consequences over current consumption. Long period resources commitment => prevent future opportunity. Management"s flexibility modified as time and information unfold => affect alternative decisions. Strategic investment: choice among alternatives, allocate resources to most succeed alternative after considering changes in natural, social, economic conditions, competitor actions. Past" financial records: limited usefulness if never operated in a similar environment. Interviews with knowledgeable individuals: company personnel creative = identify, experienced consultants = excellent resources (group brainstorming methods, decision-support software) Past financial records: limited usefulness if never operated in a similar environment. Interviews with knowledgeable individuals: company personnel, experienced consultants = estimate but notoriously weak. Publicly available infor: news, gov, foundation, industry analysis = excellent resources. Sensitivity analysis: forecasts effects of likely change in each future, relevant event of investment outcomes. Scenario analysis: forecast effects of likely combination of future events on investment outcomes.