TAILIEUCHUNG - Lecture Investment analysis & portfolio management - Chapter 10

After studying this chapter you will be able to understand: Risk in investment appraisal, the risk adjusted discount rate, sensitivity analysis, sensitivity analysis – formulas, sensitivity analysis (d) sales volume, risk analysis in investment analysis, techniques for risk analysis. | Investment Analysis Lecture: 10 Course Code: MBF702 Outline RECAP Risk Analysis in investment analysis Techniques for risk analysis Comparing Methods 4 Risk in Investment Appraisal Risk: refers to a situation where the future is unclear and there is more than one possible outcomes. 4 5 Techniques for dealing with Risk The techniques for dealing with risk include: a) the expected NPV rule; b) the risk-adjusted discount rate approach; c) sensitivity analysis d) Simulation e) Scenario Analysis 5 6 Expected Net Present Value The expected NPV rule (ENPV): EV of a project is the mean value which will be obtained if the project was repeated many times over EV is not the most likely value of the project. It is only the weighted average of all the possible outcomes EV is calculated by multiplying the each possible outcome by its probability of occurrence and then add them up 7 Example Shorten Ltd needs to purchase a machine to manufacture a new product. The choice lies between two machines .

• Tài chính doanh nghiệp
• Investment analysis
• Portfolio management
• Investment management
• Investment theory
• Investment environment
• Investment analysis
• Investment companies
• Time value of money
• Characteristics of investment
• Investment portfolio management
• Investment analysis & portfolio management
• Investment background
• Developments in investment theory
• Management of common stocks