CIMA P2 Chapter 11: The treatment of uncertainty and risk in decision making

By the end of this session you should be able to:

• evaluate information to support project appraisal

• analyse information for use in long-term decision making, including considerations of tax and inflation

• identify and integrate non-financial factors in long-term decisions

• discuss the financial consequences of dealing with long-run projects, and the importance of accounting for the time value of money

• discuss the process of investment decision making, including origination of proposals, creation of capital budgets, go/no go decisions

• use discounting, including the use of annuities in comparing projects with unequal lives

• evaluate capital investment real options

and answer questions relating to these areas.