CF2 Ch 10 The Basics of Capital Budgeting Evaluating Cash Flows 公司财务与金融 课件.pptVIP

Chapter 10 The Basics of Capital Budgeting: Evaluating Cash Flows Topics Overview and “vocabulary” Methods Payback, discounted payback NPV IRR, MIRR Profitability Index Unequal lives Economic life What is capital budgeting? Analysis of potential projects. Long-term decisions; involve large expenditures. Very important to firm’s future. Steps in Capital Budgeting Estimate cash flows (inflows outflows). Assess risk of cash flows. Determine r = WACC for project. Evaluate cash flows. Independent versus Mutually Exclusive Projects Projects are: independent, if the cash flows of one are unaffected