Example of an industry example where combining simulation with capital budgeting has led to significantly better investment decisions

What is the major shortcoming of using operating income as a performance measure for investment centers?

The best measure for evaluating the effectiveness of a manger in an investment center would be   A. residual income measures   B. current ratio measures   C. success in meeting budgeted revenues   D. success in controlling costs

discuss the advantages and disadvantages of economic value added for performance measurement

What tool can you use to incorporate probabilities into the What-If analysis? Sensitivity analysis Decision Tables Cost-volume-profit (CVP) graph Degree of operating leverage Margin of Safety

Setting balanced scorecard objectives, setting target values and aligning rewards are: Necessary steps in creating a balanced scorecard The ingredients of economic forecasting The heart and process innovation Important aspect of the capital budgeting process All are financial measures, except: Market share Revenue growth Earnings per share Reduction of past due accounts

Comparing the estimated net present values or internal rates of return for an investment using several different values for one or more key variables is called   Multiple Choice   capital budgeting.   discounting.   sensitivity analysis.   compounding.

Explain how capital budgeting helps companies contribute to value creation.  Discuss each of the following different techniques: NPV, IRR and the Payback Period analysis.  Choose one and provide an example.

"Capital budgeting is a critical process in financial management that involves evaluating and selecting long-term investments. Considering the methods used in capital budgeting, such as Net Present Value (NPV). Internal Rate of Return (IRR), and Payback Period, discuss the strengths and weaknesses of each method. How can financial managers integrate these methods to make informed investment decisions? Provide specific examples to support your discussion."

How can we maximise our return on investment (ROI) and what role does a balanced scorecard play?