Chapter Seven - The Highlights
  • show why the cost of capital and hurdle rates are not necessarily the same;
  • compare NPV with IRR and other valuation methodologies;
  • set out why NPV is a superior rule and highlight the drawbacks with IRR;
  • show why the IRR can give mislead investors in the context of selling businesses; and
  • provide a practical example of a real options valuation.
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