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Chapter 5: Project Appraisal: Capital...
Learning objectives
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After working through this chapter the reader should be able to cope with investment appraisal in an environment of capital rationing, taxation and inflation. More specifically, you should be able to:
- explain why capital rationing exists and be able to use the profitability ration in one-period rationing situations;
- show awareness of the influence of taxation on cash flows;
- discount money cash flows with a money discount rate, and real cash flows with a real discount rate.
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