Zusammenfassung der Ressource
Project Evaluation
- Financial Analysis
- Free Cash Flow (FCF):
- Cash available to all capital
providers (debt and equity)
- Equity Cash Flow (ECF)
- Cash available exclusively
to the shareholders.
- Financial Indicators
- Quantitative tools to measure
the project's attractiveness.
- NPV (Net Present Value)
- Present value of net
benefits. If NPV > 0,
the project is viable.
- IRR (Internal
Rate of Return)
- The discount rate that
makes the NPV = 0. It
represents the
project's profitability.
- B/C Ratio
(Benefit-Cost Ratio)
- Benefits divided by
costs. If B/C > 1, the
project is viable.
- Hurdle Rate
- The minimum required
rate of return to accept
the project (often the
Weighted Average Cost
of Capital - WACC).
- PP (Payback
Period)
- The time it takes for
the project to recover
the initial investment.
- Profitability
- ROI (Return on
Investment)
- A measure of the
return earned on
the invested capital.
- Time Value
of Money
- The core principle that
money available today is
worth more than the same
amount in the future.
- Value Creation
- The project's ability
to increase the value
of the firm or equity.
- Decision Making
- Financial Feasibility
- The conclusion on
whether the project is
financially acceptable
(using NPV, IRR, etc.).
- Risk Assessment
- Analysis of the
uncertainty and potential
factors that could affect
the outcomes.
- Shareholder
Value Creation
- The ultimate goal:
deciding if the project
will increase the
owners' wealth.