Corporate Finance2013-capital budgeting.pptVIP

Corporate Finance;3.1 Incremental Cash Flows;Cash Flows—Not Accounting Earnings.;Incremental Cash Flows;Estimating Cash Flows;Interest Expense;3.2 The Baldwin Company: An Example;The Worksheet for Cash Flows of the Baldwin Company;The Worksheet for Cash Flows of the Baldwin Company;;The Worksheet for Cash Flows of the Baldwin Company (continued);The Worksheet for Cash Flows of the Baldwin Company (continued);The Worksheet for Cash Flows of the Baldwin Company (continued);The Worksheet for Cash Flows of the Baldwin Company (continued);Incremental After Tax Cash Flows of the Baldwin Company;3.3 Inflation and Capital Budgeting;3.3 Inflation and Capital Budgeting;Example of Capital Budgeting under Inflation;Example of Capital Budgeting under Inflation;Example of Capital Budgeting under Inflation;Example of Capital Budgeting under Inflation;Example of Capital Budgeting under Inflation;Example of Capital Budgeting under Inflation;3.4 Investments of Unequal Lives: The Equivalent Annual Cost Method;3.4 Investments of Unequal Lives: The Equivalent Annual Cost Method;3.4 Investments of Unequal Lives: The Equivalent Annual Cost Method;Investments of Unequal Lives;Investments of Unequal Lives: EAC;Example of Replacement Projects ;Example of Replacement Projects ;Example of Replacement Projects ;Introduce new products Apple Corporation and the mouse Develop core technology Honda and small engines Create barrier to entry Polaroid’s patents on proprietary technology for instant photography development Introduce variations on existing products Chrysler’s introduction of the minivan Create product differentiation Coca-Cola—it’s the real thing Utilize organizational innovation Motorola just-in-time inventory management Exploit a new technology Yahoo!’s use of banner advertisements on the web ;Corporate Strategy and the Stock Market;3.5 Decision Trees;Example of Decision Tree;Stewart Pharmaceuticals ;Stewart Pharmaceuticals NPV of Full-Scale Production following Successful Test;Decis