capitalbudgeting教学教程幻灯片.pptVIP

John G. Kooti CAPITAL BUDGETING Dr. John G. Kooti Georgia Southwestern State University Should We Build this Plant? What is Capital Budgeting? Analysis of potential additions to fixed assets Long-term decisions, involve large expenditures Very important to firm’s future Steps in Capital Budgeting Estimate Cash Flows (Inflows/Outflows) Assess Riskiness of Cash Flows (CFs) Determine Cost of Capital --Required Rate of Return Find NPV and/or IRR Accept or Reject Based on Criteria Projects Mutually Exclusive Projects -- the acceptance of one preclude the other. Example: To get a product across