Instructions
Investigate the potential challenges of reliance on future cash flows when evaluating the viability of an acquisition of one business by another. What unanticipated events or changes could alter the projection of future income? How does the “certainty” of cash outflows and uncertainty of cash inflows change the project evaluation?
Length: Post an initial 200-word response by Wednesday
References: At least 1 peer-reviewed scholarly article from the Library.
Module 1 Required Resources
Textbook
Brigham, E. F., & Ehrhardt, M. C. (2020). Financial management: Theory and practice (16 ed.). Australia; Boston, MA: Cengage Learning.
Chapter 1
Chapter 2
Chapter 4
Chapter 13
Access your textbook via the Bookshelf tab in the top navigation bar of your course.
Articles
- The Weighted Average Cost of Capital and Its Universality in Crisis Times: Evidence from the Energy Sector. This link opens in a new windowDobrowolski, Z., Drozdowski, G., Panait, M., & Apostu, S. A. (2022). The Weighted Average Cost of Capital and Its Universality in Crisis Times: Evidence from the Energy Sector. Energies (19961073), 15(18), 6655. https://doi.org/10.3390/en15186655
- WACC This link opens in a new windowCFI Team. (n.d.). WACC. CFI. https://corporatefinanceinstitute.com/resources/va...
- A Refresher on Net Present Value This link opens in a new windowGallo, A. (2014, Nov 19). A refresher on Net Present Value . Harvard Business Review. https://hbr.org/2014/11/a-refresher-on-net-present...
Optional Resources
- The Limitations of Internal Rate of Return (IRR) for Predicting Investment Success This link opens in a new windowFundrise Team. (2016, May 04). The limitations of Internal Rate of Return (IRR) for Predicting Investment Success. Fundrise. https://fundrise.com/education/the-limitations-of-...
- Agency Theory (With Real World Examples) This link opens in a new windowBusiness School 101. (2023). Agency Theory (with real world examples) [Videos]. Business School 101.