Corporate Finance

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Corporate Finance

Postby rishabhhurkat » Mon Dec 21, 2015 4:13 am

Please explain the below statement in context of Capital Budgeting Method.

"The NPV is estimated added value from investing in the project; therefore, this added value should be reflected in co.s stock price."

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Re: Corporate Finance

Postby edupristine » Tue Dec 22, 2015 7:18 am

Please tell me the source of this statement.
But it’s a usage of Capital budgeting methods. NPV and IRR are preferred over other methods. NPV is the added value(estimated) in the project from the investment which should be shown in company’s stock price.

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