(1) What role does a finance department play in valuing business opportunities (both internal such as projects and external such as acquisitions)? (2) How might a division manager form a good working relationship with and utilize the talents of the CFO, treasurer and controller for this assignment to include in-text citations and sources that are accessible.
Undoubtedly, the finance department has a significant role in the valuation of business opportunities, both external and internal projects, and hence, in capital project decision making.
One of the roles of the finance department is in performing discounted cash flow valuation for the project at hand. In this regard, the finance department in cooperation with other key departments and personnel will have to decide on what path to use. Valuation of the expected equity stake in the project or the entire firm (Nelson, 2000, p. 540)? This decision will impact the relevant cash flows and discount rates to be included in the valuation exercise.
Moreover, the finance department can also extend its ...
This solution discusses the roles associated with a finance department within a company.