Selected Additional References and Cases 333
The literature on risk analysis in capital budgeting is vast; here is
a small but useful selection of additional references that bear di-
rectly on the topics covered in this chapter:
Ang, James S., and Wilbur G. Lewellen, “Risk Adjustment
in Capital Investment Project Evaluations,”Financial
Management,Summer 1982, 5–14.
Bower, Richard S., and Jeffrey M. Jenks, “Divisional Screen-
ing Rates,”Financial Management,Autumn 1975, 42–49.
Butler, J. S., and Barry Schachter, “The Investment Deci-
sion: Estimation Risk and Risk Adjusted Discount
Rates,”Financial Management,Winter 1989, 13–22.
Gup, Benton E., and S. W. Norwood III, “Divisional Cost of
Capital: A Practical Approach,”Financial Management,
Spring 1982, 20–24.
Weaver, Samuel C., Peter J. Clemmens III, Jack A. Gunn,
and Bruce D. Danneburg, “Divisional Hurdle Rates and
the Cost of Capital,” Financial Management,Spring 1989,
18–25.
TheCases in Financial Management series contains the follow-
ing cases that focus on capital budgeting under uncertainty:
Case 12, “Indian River Citrus Company (A),” Case 12A,
“Cranfield, Inc. (A),” Case 14, “Robert Montoya, Inc.”
focus on cash flow estimation. Case 13, “Indian River
Citrus (B),” Case 13A, “Cranfield, Inc. (B),” Case 13B,
“Tasty Foods (B),” Case 13C, “Heavenly Foods,” and
Case 15, “Robert Montoya, Inc. (B),” illustrate project
risk analysis. Case 58, “Universal Corporation,” is a com-
prehensive case that illustrates Chapters 13 and 14, as do
Cases 47 and 48, “The Western Company (A and B).”
332 Cash Flow Estimation and Risk Analysis
