--%>

Capital budgeting analysis

State some of the problems which may enter into capital budgeting analysis in case project debt is computed rather than borrowing capacity made by the project?

E

Expert

Verified

If the project debt is greater as compared to the borrowing capacity formed by capital project, and tax shields on actual new debt which are used during the analysis, APV will be overstated forming the project appear more attractive than it actually is.

   Related Questions in Financial Accounting

  • Q : Multiplicity-Creativity as process

    Define the term Multiplicity (Creativity as process) in creative industry ? And also state the different personality traits and intellectual aptitudes which might contribute to creative thinking ?

  • Q : Foreign subsidiary- financial structure

    State some of the conditions under which the foreign subsidiary’s financial structure become relevant?

  • Q : Cash flows in APV model State the

    State the intuition of discounting several cash flows in APV model at particular discount rates?

  • Q : What is Corporate Social Responsibility

    Corporate Social Responsibility directly states that every company is responsible towards the society and the environment. So this is a duty of every company to create eco-friendly new products. In the current scenario when the fuel prices are increas

  • Q : Benchmarking A way to improve

    A way to improve performance that investigates the way several different entities do the same activity and finds the best way to accomplish the activity. The best ways then become the standard or the benchmark for all the entities.

  • Q : Foreign exchange transactions Discuss

    Discuss how foreign exchange transactions between the international banks are settled?

  • Q : Procedure of bringing new international

    Describe the procedure of bringing the new international bond issue to the market.

  • Q : Contingent exposure and its benefits

    Describe the contingent exposure and also discuss some of the benefits of using currency options in order to maintain this type of currency exposure.

  • Q : Investment approach of Bill Miller

    Investment approach of Bill Miller: In comparison to both Warren Buffet and Peter Lynch, Miller is considered to be a slightly more aggressive investor.  Miller believed in playing big which meant that he used

  • Q : Types of fixed asset in accounting How

    How many kinds of fixed asset are there in accounting? What are they?