-公司理财-CapitalInvestmentDecisions推荐.pptVIP

Capital Investment Decisions 2.1 Net Present Value 2.2 Project Valuation in a Riskless World Fisher’s Principle 2.3 Present Value and Compounding 2.4 Present Value with Special Cash Flows (RWJ Ch 3, 4) Investment Decision Example 1: Suppose an investment that promises to pay $10,000 in one year is offered for sale for $9,500. Your interest rate is 5%. Should you buy? 2.1 Net Present Value : FV and PV Net Present Value The Net Present Value (NPV) of an investment is the present value of the expected cash flows, less the cost of the investment. Net Present Value as the Investment Criterion In the one-period case, the formula for NPV can be written as: 2.2 Project Evaluation in a Riskless World (I) Saving (Financing) Decision Use PV to Check Feasibility of Consumption plan (Ⅱ) Investment Opportunities Corporate Investment Decision?Making (Ⅲ) Investment Opportunities with Financial Markets Project Valuation in a Riskless World Corporate Investment Decision?Making In reality, shareholders do not vote on every investment decision faced by a firm and the managers of firms need decision rules to operate by. All shareholders of a firm will be made better off if managers follow the NPV rule—undertake positive NPV projects and reject negative NPV projects. Optimal Investment Plan Fisher’s Separation Principle Why do we use NPV or PV as investment criterion NPV as Investment Criterion 2.3 Present Value and Compounding How much would an investor have to set aside today in order to have $20,000 five years from now if the current rate is 15%? How Long is the Wait? Example 5: If we deposit $5,000 today in an account paying 10%, how long does it take to grow to $10,000? What Rate Is Enough? Example 6: Assume the total cost of a college education will be $50,000 when your child enters college in 12 years. You have $5,000 to invest today. What rate of interest must you earn on your investment to cover the cost of your child’s education? 2.4 PV with S