The capital budgeting decision techniques that you have learned all have strengths and weaknesses, but they do comprise the most popular rules for valuing projects. Valuing entire businesses, on the other hand, requires that some adjustments be made to various pieces of these methodologies. For example, one alternative to NPV (Net Present Value) used quite frequently for valuing firms is called APV (Adjusted Present Value.)
To explore these alternative decision rules, use both your text and the Internet – do a Web search on Google at www.google.com – and look up both NPV and APV. Then, answer these questions in 1-2 well-developed paragraphs:
1. What is APV, and how does it differ from NPV?
2. What other business valuation models are currently popular, and when are they being used?
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