Lesson 5 Capital budgeting 英文相关管理会计课件 Management Accounting.pptVIP

capital budgeting;Lesson 5 Topics outline;Topic 1: Capital budgeting stages;Capital Budgeting;Six Stages in Capital Budgeting;Topic 2: Time value of money;Topic 3: Discounted cash flows: Netpresent value;The Net Present Value Method;General decision rule of NPV Method;General decision rule of NPV Method;The NVP model assumes that all cash flows generated by a project are immediately reinvested to earn the required rate of return throughout the life of the project.; Amortization allowances for income tax purposes;Income Taxes and Capital Budgeting;Tax impact on cash flows;Capital Cost Allowance;Capital Cost Allowance;Capital Cost Allowance Tax Shield;Example: NPV of a tax shield (CCA);Example: NPV of a tax shield (CCA) Calculation of present value of tax savings;Represents correction factor to account for half-year rule during year of acquisition.;NPV of a tax shield ;NPV of a tax shield ;NPV of a tax shield ;Computer illustration 5-1: Net present value of a tax shield and cash flow;Computer illustration 5-2: Net present analysis;Topic 4: Discounted cash flows:Internal rate of return;The Internal Rate of Return Method;Uneven cash flow: Example;Uneven cash flow: Example;Internal Rate of Return;Capital Budgeting and Taxes: IRR;IRR NPV Assumptions;NPV Compared With IRR;NPV Compared With IRR;Capital Budgeting Decisions;Topic 5: Sensitivity analysis andrelevant cash flows;Sensitivity analysis;Sensitivity analysis;Relevant cash flows;Topic 6: Payback period and accrualaccounting rate of return;The Payback Method;Equivalent-cash-flow methods (ECFs);Evaluation of the Payback Method;Evaluation of the Payback Method;Accrual Accounting Rate of Return (AARR);Accounting Rate of Return (ARR);Evaluation of the AARR;Easy to understand, and use numbers reported in financial statements A screening measure to ensure that new investment will not adversely affect net income To ensure a favorable effect on net income so that bonuses can be earned (increased);Topic 7: Complexities