约当每年成本.ppt

* 12 Net Present Value - Present value of cash flows minus initial investments. Present Value – Value of discounted cash flows at time t = 0 * 8 * 8 Co = $1000 C1 = $0 C2 = $1,200 r = 0.10 * 13 Net Present Value Rule – Managers increase shareholders’ wealth by accepting all projects that are worth more than they cost. Therefore, they should accept all projects with a positive net present value. * 13 Net Present Value Rule – Managers increase shareholders’ wealth by accepting all projects that are worth more than they cost. Therefore, they should accept all projects with a positive net present value. 38 42 Equivalent Annual Annuity - The cash flow per period with the same present value as the cost of buying and operating a machine. Annuity Factor - The present value of $1 paid every year for each of t years. Note: Think of the equivalent annual annuity as the level annual charge that is necessary to recover the present value of investment outlays and operating costs. 45 Equivalent Annual Annuity- The cash flow per period with the same present value as the cost of buying and operating a machine. 28 Payback Period - Time until cash flows recover the initial investment of the project. * 13 Payback Rule - Specifies that a project be accepted if its payback period is less than the specified cutoff period. The following example will demonstrate the absurdity of this statement. 32 * 13 Discounted Payback Rule – This is the number of periods before the present value of prospective cash flows equals or exceeds the initial investment. 20 Internal Rate of Return (IRR) - Discount rate at which NPV = 0. Sometimes termed the discounted cash flow (DCF) rate of return. 23 Calculating the IRR can be a laborious task. Fortunately, financial calculators and spreadsheets can perform this function easily * 13 IRR Rule – Managers increase shareholders’ wealth by accepting all projects which offer a rate of return that is higher than the opportunity cost of capital. 24 Note: The I