This case enables students to learn the principles of capital budgeting in a worldwide context. It features a power company in Brazil, which is a subsidiary of AES Corporation. A newly hired manager in the company is delegated his first big job to defend and to evaluate the case for investing in a 500 MW thermal power plant.
The supervisor must work on the valuations for a base case as well as both the optimistic and pessimistic scenario.
Learning Objective: Build a discounted free cash flow model to value a project. Comprehend the impact of government regulation on capital investment. Discuss alternative bidding strategies and possibility levers when executing capital budgeting that a firm could use.
Publication Date: 10/22/2015
This is just an excerpt. This case is about Finance
