You are leading a training session for co-workers in your workplace on conducting a Sensitivity Analysis as a tool for Capital Budgeting. In your presentation, propose quantitative and qualitative factors, methods, or techniques used to integrate risk into proper capital budgeting decisions.
Prepare a PowerPoint presentation on this topic. In 7 content slides,
• Identify the goal and functions of financial management.
• Distinguish which qualitative and quantitative steps are necessary in conducting a Sensitivity Analysis.
• Describe the internal and external financial methods used to determine a project’s risk integrated into a Capital Budgeting analysis.
Sample Answer
Here is a structured PowerPoint presentation designed for a professional training session. It includes 7 content slides, plus a title slide and a reference slide.
Presentation Title: Mastering Risk: Sensitivity Analysis in Capital Budgeting Target Audience: Finance and Project Management Teams Format: Slide Content followed by Speaker Notes
Slide 1: Title Slide
Title: Integrating Risk into Capital Budgeting: A Deep Dive into Sensitivity Analysis Subtitle: Techniques for Smarter Investment Decisions Presenter: [Your Name] Date: November 28, 2025
Slide 2: The Goal and Functions of Financial Management
Title:
Slide 2: The Goal and Functions of Financial Management
Title: The Foundation: Goals & Functions of Financial Management
The Primary Goal:
Maximizing Shareholder Wealth: The ultimate objective is to increase the long-term value of the firm, reflected in the stock price.
Note: This is distinct from simply maximizing short-term profit.
Key Functions Driving this Goal:
Financing Decisions: Determining the optimal mix of debt and equity (Capital Structure).
Dividend Decisions: Deciding how much profit to return to owners vs. reinvesting.
Working Capital Management: Managing short-term assets and liabilities to ensure liquidity.
Investing Decisions (Capital Budgeting): Allocation of capital to long-term assets or projects.
This is the focus of today’s training.
Speaker Notes: "Welcome, everyone. Before we dive into the math of risk analysis, we must ground ourselves in why we are doing this. As financial managers, our primary goal isn't just to make a quick buck today; it’s to maximize shareholder wealth over the long term. We achieve this through four pillars: financing, dividend policy, working capital, and—our focus today—investing decisions, also known as Capital Budgeting. If we get capital budgeting wrong by ignoring risk, we destroy value rather than create it."