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Capital Budgeting: Financial Appraisal of Investment Projects

Don Dayananda, Richard Irons, Steve Harrison, John Herbohn, Patrick Rowland

Chapter 13

Financial modelling case study in forestry project evaluation - all with Video Answers

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Chapter Questions

Problem 1

Consider an investment area with which you are familiar. What (if any) software packages are available designed specifically for financial analysis in this area? What features do these packages possess which you consider useful for project evaluation?

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Problem 2

Consider an investment area with which you are familiar. Suppose that development of a financial model which can be used to evaluate a range of investment proposals is being contemplated.
(a) Identify some of the uses to which such a model could be put.
(b) Which financial performance criteria would you consider to be most appropriate for these types of applications? Explain your logic.
(c) How would you suggest the generic model should be designed? Suggest a model structure and set of features, and illustrate with diagrams.
(d) What default data do you think would be useful to include in this model?
(e) Develop designs for:
(i) the opening computer screen for the model
(ii) data input screens
(iii) data output screens.
(f) Explain how such a model could be tested and how it might be maintained.

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