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Project sequencing
#analyst-notes #cfa-level-1 #corporate-finance #reading-35-capital-budgeting #study-session-10
Many projects are sequenced through time, so that investing in a project creates the option to invest in future projects. For example, you might invest in a project today and then in one year invest in a second project if the financial results of the first project or new economic conditions are favorable. If the results of the first project or new economic conditions are not favorable, you do not invest in the second project.
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Subject 2. Basic Principles of Capital Budgeting
n select one or another but not both. Independent projects, on the other hand, do not compete for the firm's resources. A company can select one or the other or both, so long as minimum profitability thresholds are met. <span>Project sequencing. How does one sequence multiple projects over time, since investing in project B may depend on the result of investing in project A? Unlimited funds versus capital rati


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