财务管理第六章-利用NPV进行投资决策.pptVIP

6- * McGraw Hill/Irwin Copyright ? 2003 by The McGraw-Hill Companies, Inc. All rights reserved Making Investment Decisions with the Net Present Value Rule Principles of Corporate Finance Chapter 6 Copyright ? 2003 by The McGraw-Hill Companies, Inc. All rights reserved Topics Covered What To Discount IMC Project Project Interaction Equivalent Annual Cost What To Discount Only Cash Flow is Relevant What To Discount Do not confuse average with incremental payoffs Include all incidental effects Do not forget working capital requirements Forget sunk costs Include opportunity costs Beware of allocated overhead costs Points to “Watch Out For” Be consistent in how you handle inflation!! Use nominal interest rates to discount nominal cash flows. Use real interest rates to discount real cash flows. You will get the same results, whether you use nominal or real figures Inflation INFLATION RULE IMC’s Guano Project Revised projections ($1000s) reflecting inflation IMC’s Guano Project Cash flow analysis ($1000s) IMC’s Guano Project NPV using nominal cash flows IMC’s Guano Project Details of cash flow forecast in year 3 ($1000s) IMC’s Guano Project Tax depreciation allowed under the modified accelerated cost recovery system (MACRS) (Figures in percent of depreciable investment) Tax depreciation Year 1: 20 Year 2: 32 Year 3: 19.2 Year 4 11.52 Year 5: 11.52 Year 6 5.76 Tax depreciation is lower in the first year because assets are assumed to be in service for only six month IMC’s Guano Project Tax Payments ($1000s) IMC’s Guano Project Revised cash flow analysis ($1000s) Equivalent Annual Cost Equivalent Annual Cost - The cost per period with the same present value as the cost of buying and operating a machine. Equivalent Annual Cost Equivalent Annual Cost - The cost per period with the same present value as the cost of buying and operating a machine. Example Given the following costs of operating two machines and a 6% cost of capital, select the lower cost machine using equ