ADMS 1500 Lecture Notes - Lecture 10: Discounted Cash Flow, Capital Budgeting, Net Present Value

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A business may be through of as two separate, but related, decision activities: Short-term decisions affect the organization for a short period, involve small amounts of money and can be reversed at little cost. Long-term decisions affect the organization over a long period involve a large amount of money and cannot be reversed, except at great cost. The process should be standardized throughout the organization. The proposal should be a good fit with the organization"s strategy. 4: forecast information should be analyzed through: i: ii: iii: iv: payback; return on investment; net present value risk analysis. Process for making long term planning decision for investments. Meaning that a dollar received today is worth more than a dollar received tomorrow. Discounted cash flow ( dfc ) measures cash inflows and outflows of a project as if they occurred at a single point in time. Focuses on cash inflows and outflows rather than net income.

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