CFAL1公司理财最权威讲义以与习题(Corporate Finance Kevin).pdf

Different ways of evaluating project Definition Definition Formula Definition Formula Formula n 1 2 n t ƒSum of the present 0 CF CF CF CF Net Present NPV CF 1 2 n ƒ t Net Present (1 ) (1 )k (1 )k (1 )k t 0 k y y y value of all the expected y Value Value ƒNPV>0Æaccept incremental cash flows; ƒNPV<0Æreject CF CF CF n CF ƒIRR is the discount rate 1 2 n t 0 CF 1 2 n ƒ t 0 that makes the present value IRR IRR IRR IRR Internal (1 ) (1 ) (1 ) (1 ) t0 Internal of the expected incremental Rate of Return Rate of Return after-tax cashflows equal to ƒIRR>the required rate of returnÆaccept the initial cost of project. ƒIRR<the required