This week’s topics
Investment appraisal and business strategy
- Discounted cash flow techniques
- Non-discounted appraisal methods
- Capital rationing under constraints
- Strategic risk-adjusted hurdle rates
- Discounted Cash Flow Further Aspects, Capital Rationing - ACCA Financial Management (FM)
- WACC vs hurdle rate
What you will be able to do
- 2.4 Explain the techniques used in the development of a business investment strategy.
Activity
Start with this week’s 2 videos, then: Seminar, guided reading and a short written task: explain the techniques used in the development of a business investment strategy.
Study materials
Videos
- Discounted Cash Flow Further Aspects, Capital Rationing - ACCA Financial Management (FM) · YouTube · OpenTuition · 27 min · for registered students
- WACC vs hurdle rate · YouTube · The Finance Storyteller · 6 min · for registered students
- When (and when not!) to use the WACC for Investment appraisal · YouTube · OpenTuition · 13 min · for registered students
- Discounted Cash Flow – Internal Rate of Return - ACCA Financial Management (FM) · YouTube · OpenTuition · 19 min · for registered students
- INVESTMENT APPRAISAL (PART 1) · YouTube · FOG Accountancy Tutorials · 34 min · for registered students
- INVESTMENT APPRAISAL (PART 4) · YouTube · FOG Accountancy Tutorials · 15 min · for registered students
- Discounted Cash Flow Further Aspects, Replacement - ACCA Financial Management (FM) · YouTube · OpenTuition · 26 min · for registered students
Further resources
- Principles of Accounting, Volume 2: Managerial Accounting, ch. 11: Capital Budgeting Decisions · PDF · OpenStax, textbook chapter; pp. 517–564 · for registered students
- Managerial Accounting, ch. 8: How Is Capital Budgeting Used to Make Decisions? · PDF · Saylor Academy, textbook chapter; pp. 472–540 · for registered students
- Principles of Finance 2e, ch. 16.5: Choosing between projects · PDF · OpenStax, textbook chapter; pp. 480–485 · for registered students
Materials marked “for registered students” open in the student portal, which is set up as soon as you receive final acceptance.