Table of Contents
Introduction
International Investment Decisions
The Parties to the Negotiation
Hangzhou Power: Summary Spreadsheet
Hangzhou: Project Cash Flows
The Relevant Cash Flows
Cash Flow Components
Finding the Operating Cash Inflows
Finding the Terminal Cash Flow
Hanel: Cash Flow from Operations
Interpreting the Cash Flows: NPV
Internal Rate of Return
IRR is calculated by solving:
Adjusted Present Value in International Capital Budgeting
Inflation and Devaluation
Blocked Funds
Adjusting for Risk
RADR and CAPM
RADR and CAPM
Risk-Adjusted Investment Cutoff Rates
Risk-Adjusted Investment Cutoff Rates
Financing Decisions
Financing Choices
Does Capital Structure Matter?
Optimal Capital Structure?
Equity Returns and the Financing Mix
Equity Returns and the Financing Mix
Equity Returns and the Financing Mix
Equity Returns and the Financing Mix
What is the optimal debt ratio? The tax rate makes a difference!
A Roadmap for Financing Choices
What’s Special About Project Financing?
Project Financing
Sample Structure
Sample Structure
Sample Structure
The End
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Contact: Ian Giddy (igiddy@stern.nyu.edu)
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