Corporate Finance MBA Spring 2021 - Session 15: Investment Interactions, Side Costs and Side Benefits

In this session, we started by looking at mutually exclusive investments, and contrasting NPV and IRR and why they might give you different decisions, and noted the differences in reinvestment assumptions. We then talked about the side costs that projects can create for companies, when they use its existing resources, and how to estimate the opportunity costs. Finally, we turned our attention to side benefits that can accrue to a company from a new project, and how that benefit can be captured analysis, extending from additional revenues on an existing business line to synergies in acquisitions. Slides: http://www.stern.nyu.edu/~adamodar/podcasts/cfspr21/session15slides.pdf Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session15atest.pdf Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session15asoln.pdf