The Capital Budgeting Decision: Economic Analysis Of Investment Projects

Individuals and businesses face large numbers of decisions where it is feasible to quantify key costs and benefits of a long-lived project. This invaluable book enables the decision-maker to make informed choices presented with elements of time and risk. While other measures can help describe the outcomes, Bierman and Smidt's book focuses on the theme of net present value (NPV) - how it is the most reliable single measure of value, and of how it is important for those making investment decisions to understand the limitations of the different calculations.

Here in its ninth edition, this classic text returns to its roots as a clear and concise introduction to this complex but essential topic in corporate finance. An expanded theme of this edition is adjusting for uncertainty and a wholly new chapter exploring the use of real options has been added. Retaining the authority and reputation of previous editions, it now covers in depth several topics which are under explored by the competition including:

• distribution policy and capital budgeting;
• a firm investing in a second firm;
• investing in current assets.

Easily understandable, and covering the essentials of capital budgeting, this book will help readers to make intelligent capital budgeting decisions for corporations of every type.

Harold Bierman, Jr. is the Nicholas H. Noyes Professor of Business Administration at the Johnson Graduate School of Management, Cornell University.

Seymour Smidt is Professor Emeritus at the Johnson Graduate School of Management, Cornell University.