lecture7Using Discounted Cash Flow Analysis to Make Investment Decisions(廖咸与)概要1.pptVIP

Topics Covered Discounted Cash Flows, NetProfits Incremental Cash Flows Treatment of Inflation Separation of Investment Financing Decisions Example: Blooper Industries Cash Flow vs. Accounting Income Discount actual cash flows Using accounting income, rather than cash flow, could lead to erroneous decisions. Incremental Cash Flows Discount incremental cash flows Include All Indirect Effects Forget Sunk Costs Include Opportunity Costs Recognize the Investment in Working Capital Beware of Allocated Overhead Costs Incremental Cash Flows IMPORTANT Ask yourself this question Would the cash flo