原创力文档- 1、本文档共43页，可阅读全部内容。
- 2、原创力文档（book118）网站文档一经付费（服务费），不意味着购买了该文档的版权，仅供个人/单位学习、研究之用，不得用于商业用途，未经授权，严禁复制、发行、汇编、翻译或者网络传播等，侵权必究。
- 3、本站所有内容均由合作方或网友上传，本站不对文档的完整性、权威性及其观点立场正确性做任何保证或承诺！文档内容仅供研究参考，付费前请自行鉴别。如您付费，意味着您自己接受本站规则且自行承担风险，本站不退款、不进行额外附加服务；查看《如何避免下载的几个坑》。如果您已付费下载过本站文档，您可以点击 这里二次下载。
- 4、如文档侵犯商业秘密、侵犯著作权、侵犯人身权等，请点击“版权申诉”（推荐），也可以打举报电话：400-050-0827(电话支持时间：9:00-18:30)。
Shouldwebuildthisplant?CHAPTER11
TheBasicsofCapitalBudgeting
Whatiscapitalbudgeting?Analysisofpotentialadditionstofixedassets.Long-termdecisions;involvelargeexpenditures.Veryimportanttofirm’sfuture.
Steps
1.EstimateCFs(inflowsoutflows).2.AssessriskinessofCFs.3.Determinek=WACC(adj.).4.FindNPVand/orIRR.5.AcceptifNPV0and/orIRRWACC.
Whatisthedifferencebetweenindependentandmutuallyexclusiveprojects?
Projectsare: independent,ifthecashflowsofoneareunaffectedbytheacceptanceoftheother. mutuallyexclusive,ifthecashflowsofonecanbeadverselyimpactedbytheacceptanceoftheother.
AnExampleofMutuallyExclusiveProjectsBRIDGEvs.BOATtogetproductsacrossariver.
NormalCashFlowProject:Cost(negativeCF)followedbyaseriesofpositivecashinflows.Onechangeofsigns.NonnormalCashFlowProject:Twoormorechangesofsigns.Mostcommon:Cost(negativeCF),thenstringofpositiveCFs,thencosttocloseproject.Nuclearpowerplant,stripmine.
Inflow(+)orOutflow(-)inYear012345NNN-+++++N-++++-NN---+++N+++---N-++-+-NN
Whatisthepaybackperiod?Thenumberofyearsrequiredtorecoveraproject’scost,orhowlongdoesittaketogetourmoneyback?
PaybackforProjectL
(Long:LargeCFsinlateryears100=CFtCumulative-100-90-3050PaybackL2 + 30/80 =2.375years01002.480
ProjectS(Short:CFscomequickly)7020500123-100CFtCumulative-100-302040PaybackL1+30/50 =1.6years10001.6=
StrengthsofPayback:1. Providesanindicationofaproject’sriskandliquidity.2. Easytocalculateandunderstand.WeaknessesofPayback:1. IgnorestheTVM.2. IgnoresCFsoccurringafterthepaybackperiod.
DiscountedPayback:UsesdiscountedratherthanrawCFs.1080600123CFtCumulative-100-90.91-41.3218.79Discountedpayback2+41.32/60.11=2.7yearsPVCFt-100-10010%9.0949.5960.11=Recoverinvest.+cap.costsin2.7years.
NPV: SumofthePVsofinflowsandoutflows.
Wh
文档评论（0）