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Capital Budgeting: Financial Appraisal of Investment Projects

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

Chapter 4

Forecasting cash flows: qualitative or judgemental techniques - all with Video Answers

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Chapter Questions

02:11

Problem 1

Under what circumstances is the use of qualitative forecasting techniques appropriate?

Joshua Argo
Joshua Argo
Numerade Educator

Problem 2

Outline the steps involved in undertaking a survey to collect forecast estimates from individuals. Outline the advantages and disadvantages of using groups, as opposed to individuals, to provide forecasts.

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Problem 3

What are the steps normally applied when undertaking a Delphi survey? What are some of the variants of this method?

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00:36

Problem 4

How is the nominal group technique (NGT) different from the Delphi method?

Maxime Rossetti
Maxime Rossetti
Numerade Educator

Problem 5

Outline the 'jury of expert opinion' method. How does this differ from the Delphi method?

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03:36

Problem 6

A company offering eco-tourism adventures wishes to forecast the numbers of annual tourists of various types coming to a region five years from now, and chooses the Delphi method to develop its forecasts.
(a) Explain how a panel of appropriate experts could be selected.
(b) Suggest how the information given to the panel and the questions could be framed.
(c) How many rounds of data collection would you expect to undertake? Discuss how these would proceed.

Chengyu Li
Chengyu Li
Numerade Educator
01:05

Problem 7

The management of a coal-fired electricity generation station is concerned that new technology to reduce carbon dioxide emissions will be required to offset emissions, and measures such as purchase of carbon credits will be required if the national government signs up to the Kyoto Protocol. The severity of adjustment for the company will depend on the extent of reduction in greenhouse-gas emissions agreed to by the national government. Explain how scenario forecasting could be used to aid decisionmaking by the company.

Emily Marty
Emily Marty
Numerade Educator
03:13

Problem 8

A company engaged in sugar refining and export wishes to make medium-term projections of international sugar prices. Suggest a method that could be used to make these forecasts.

Niamat Khuda
Niamat Khuda
Numerade Educator