CapBudReview - Capital Budgeting in Practice -1- Milestones...

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- 1 - Capital Budgeting in Practice - 2 - Milestones in Development of NPV Analysis F For many years there was just the Payback Period F 1899: Irving Fischer first articulates concept NPV = Mkt value of securities minus cost of resources F 1929: Irving Fischer, Theory of Interest NPV is key part in theory of optimal resource allocation F 1951: Joel Dean, Capital Budgeting Implementation of DCF methodology in current form F 1964: John Magee, “Decision Trees for Decision Making” Incorporates decision tree methods into capital budgeting F 1964: David Hertz, “Risk Analysis in Capital Budgeting” Incorporates computer simulation into capital budgeting F 1964: William Sharpe introduces CAPM and SML
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- 3 - Milestones in Development of NPV Analysis F 1973: Black, Scholes, and Merton develop 1st Option Pricing Model F 1978: Stewart Myers introduces concept of Real Options F 1997: 1st Annual International Conference on Real Options, Columbia University F text based entirely upon options analysis - 4 - Readings Package
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- 5 - Gitman & Forrester - 6 - Gitman & Forrester
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- 7 - Gitman & Forrester - 8 - Gitman & Forrester
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- 9 - Gitman & Forrester - 10 - Gitman & Forrester
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- 11 - Gitman & Forrester - 12 - Gitman & Forrester
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- 13 - Gitman & Forrester - 14 - Gitman & Forrester
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- 15 - Gitman & Forrester - 16 - Shakey Foundations of Capital Budgeting (1976) F Begins by criticizing reliance upon forecasting F Shifts to early-stage discussion of strategic considerations as basis for capital investment decisions
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- 17 - Shakey Foundations of Capital Budgeting (1976) - 18 - Shakey Foundations of Capital Budgeting (1976)
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- 19 - Shakey Foundations of Capital Budgeting (1976) - 20 - Shakey Foundations of Capital Budgeting (1976)
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This note was uploaded on 04/15/2011 for the course FINA 5220 taught by Professor Staff during the Spring '08 term at North Texas.

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CapBudReview - Capital Budgeting in Practice -1- Milestones...

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