the basics of capital budgeting

... independent, if the cash flows of one are  unaffected by the acceptance of the other mutually exclusive, if the cash flows of one  can be adversely impacted by the  acceptance of the other   Cash Flows for Franchise L  ... Chapter 11 The Basics of Capital  Budgeting:  Evaluating Cash Flows   Topics   Overview and “vocabulary” Methods    NPV IRR, MIRR Payback, discounted payback   What is capital budgeting? ... -100.00 10 60 80 70 50 20 L’s CFs: S’s CFs: 10% 10% -100.00   NPV: Sum of the PVs of all  cash flows n NPV = ∑ t=0 CFt (1 + r)t Cost often is CF0 and is negative n NPV = ∑ t=1 CFt CF (1 + r)t   What’s Franchise L’s NPV?

Ngày tải lên: 16/01/2020, 19:33

... DISC.FOFM.BRIG.16.03 - Capital budgeting and cost of capital TOPICS: PV of cash flows KEYWORDS: Bloom’s: Knowledge Assuming that their NPVs based on the firm's cost of capital are equal, the NPV of a project ... 11—THE BASICS OF CAPITAL BUDGETING STATE STANDARDS: TOPICS: KEYWORDS: United States - OH - DISC.FOFM.BRIG.16.03 - Capital budgeting and cost of capital NPV and IRR Bloom's: Comprehension 21 The ... repeatable The CEO believes the IRR is the best selection criterion, while the CFO advocates the NPV If the decision is made by choosing the project with the higher IRR rather than the one with the

Ngày tải lên: 05/09/2020, 16:45

... Introduction to Capital Budgeting Sources of Information  Most of the information needed to make capital-budgeting decisions is generated internally, likely beginning with the sales force  Then the production ... The cash flows of a project fall into the following three categories: The initial investment; The incremental (relevant) cash inflows over the life of the project; The terminal cash flow The ... đầu tư 128 Capital Budgeting in Practice Statistics  Practitioners’ Methods of Choice  The below table summarizes surveys of practitioners on the capital-budgeting methods of choice  There has

Ngày tải lên: 21/02/2023, 09:05

... internal rate of return of 18 percent, while Project B has an internalrate of return of 30 percent The two projects have the same risk, thesame cost of capital, and the timing of the cash flows ... series of positive cash flows One ofthe projects, however, is much larger than the other If the cost ofcapital is 16 percent, the two projects have the same net present value(NPV); otherwise, their ... exceeds the cost ofcapital, then the project must have a positive NPV b If the IRR of Project A exceeds the IRR of Project B, then Project Amust also have a higher NPV c The modified internal rate of

Ngày tải lên: 22/11/2016, 11:02

... projects – if the cash flows of one are unaffected by the acceptance of the other Mutually exclusive projects – if the cash flows of one can be adversely impacted by the acceptance of the other 10-4 ... CHAPTER 10 The Basics of Capital Budgeting Should we build this plant? 10-1 What is capital budgeting?    Analysis of potential additions to fixed assets Long-term ... Perhaps a hybrid of the IRR that assumes cost of capital reinvestment is needed 10-23 Since managers prefer the IRR to the NPV method, is there a better IRR measure?   Yes, MIRR is the discount

Ngày tải lên: 17/08/2018, 14:21

... 1.1 Background of the Study 11 1.2 Objective of the Study 12 1.3 Important of the Study 12 THEORETICAL PERSPECTIVES, LITERATURE REVIEW AND STUDIES, RESEARCH QUESTIONS AND HYPOTHESES 14 2.1 Introduction ... stewardship theory, q u a n t i t a t i v e research, qualitative research TABLE OF CONTENTS Page TITLEPAGE DECLARETION ACKNOWLEDGEMENT ABSTRACT TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURE LIST OF ... study, the researcher examines with 33 Vietnamese Bank Objective of the study is to verify the relation between women on the board and bank performance Quantitative method is applied The quantitative

Ngày tải lên: 09/09/2013, 23:50

... of the river Local residents of the nearby Yacht Club condominiums may complain about the radio tower spoiling their view of the sunset Don’t forget to add in the cost of hiring ... describe the readily available than others configuration of a cable The For example, the most expr ession is often used in the common type of fiber cable following manner: The cable ... and the. .. combine the use of several Copper Media The electrical properties of copper wire create resistance and interference The further communication signals travel the more they

Ngày tải lên: 05/07/2014, 00:21

... so they are not included in the calculation of the cost of capital. We do adjust for these items when calculating the cash flows of a project, but not when calculating the cost of capital. ... target weights, then use the current market value of equity, and never the book value of equity If you don’t know the market value of. .. then the book value of debt often is a reasonable ... cost of capital. Most firms incorporate tax effects in the cost of capital. Therefore, focus on after-tax costs. Only cost of debt is affected. 5 B02022 – Chapter 7 – The Cost of Capital

Ngày tải lên: 12/07/2014, 14:12

... study calculates the numerator of the market-to-book ratio (MB) as the sum of the market value of equity and the book values of preferred stock and borrowings. The market value of equity for ... measures the volatility of earnings over the preceding five years. The quasi market value of assets that forms the denominator of the debt ratios DRM, LDRM, and SDRM is calculated as the sum of the ... that factors such as the degree of asset substitution problems, risk of bankruptcy, the existence of tax shields, the degree of the underinvestment problem, and the degree of information asymmetry

Ngày tải lên: 12/07/2014, 19:09

... severity of the spill. The purpose of contingency plans is to coordinate all aspects of the response to an oil spill. This includes stopping the flow of oil, containing the oil, and cleaning it up. The ... serious. As the seriousness of an incident is often not known in the initial phases, one of the first priorities is to determine the magnitude of the spill and its potential impact. Alerting the first ... contingency plan for this phase of the operation and the importance of a high level of training in first response. Stopping the flow of oil is a priority in the first phase of the operation, although response

Ngày tải lên: 11/08/2014, 04:20

... portion of the boom above the water, which prevents oil from washing over the top of the boom. The term freeboard is also used to refer to the height from the water line to the top of the boom. The ... skirt is the portion of the boom below the floats or flotation that helps to contain the oil. It is usually made of the same types of fabric as the freeboard member and the covering of the floats. ... by the amount of flotation and the weight of the boom. This means that the float must provide enough buoyancy to balance the weight of the boom with the force exerted by currents and waves, thereby

Ngày tải lên: 11/08/2014, 04:20

... CALLED THE PROJECT COST OF CAPITAL IN CAPITAL BUDGETING FIND (A) THE PV OF THE EXPECTED CASH FLOWS AND/OR (B) THE ASSET’S RATE OF RETURN IF THE PV OF THE INFLOWS IS GREATER THAN THE PV OF THE OUTFLOWS ... TO THE VALUE OF THE FIRM D WOULD THE NPVs CHANGE IF THE COST OF CAPITAL CHANGED? ANSWER: THE NPV OF A PROJECT IS DEPENDENT ON THE COST OF CAPITAL USED THUS, IF THE COST OF CAPITAL CHANGED, THE ... when the company wants to know if the expected value of the cash flows is greater than the cost of the project, and whether or not the expected rate of return on the project exceeds the cost of the...

Ngày tải lên: 01/07/2014, 21:28

... flows of one are unaffected by the acceptance of the other mutually exclusive, if the cash flows of one can be adversely impacted by the acceptance of the other 10 - What is the payback period? The ... cost of capital Capital rationing 10 - 51 Increasing Marginal Cost of Capital  Externally raised capital can have large flotation costs, which increase the cost of capital  Investors often ... If profiles don’t cross, one project dominates the other 10 - 26 Two Reasons NPV Profiles Cross Size (scale) differences Smaller project frees up funds at t = for investment The higher the opportunity...

Ngày tải lên: 06/04/2015, 19:41

... Understand the cost of capital and the specific sources of capital associated with the cost of capital • Determine the cost of debt and preference share capital • Calculate cost of ordinary share capital, ... next dollar of total new financing  Is an increasing function of the level of total new financing  The ‘break point’ is the level of total new financing at which the cost of one of the financing ... wi = Proportion of long term debt in the capital structure wp = Proportion of preference share capital in the capital structure ws = Proportion of ordinary share equity in the capital structure...

Ngày tải lên: 16/12/2013, 14:57

... THE BASICS OF SOCIAL MARKETING The Basics of Social Marketing is one of several social marketing resources available for public health professionals from Turning Point, and the Turning ... and how it affects the desired change? ® Taken together, will the overall mix of interventions reach enough of the target audience often enough to have the desired impact? ® Is the overall mix feasible ... was the fear that boiling would “boil in the dirt” and affect the taste A taste test showed that not to be the case ® 15 Collaboration with the Office of Minority Affairs helped reach many of the...

Ngày tải lên: 18/02/2014, 02:20

... per day? Could they make one per day by writing their name on it? They could There are loads of other ways of both saving the company money and respecting the planet Brainstorm them 91 Be fast ... At The Basics of Business 100: 85 Don’t rush recruitment; you’ll live with the consequences for years Spend the right amount of time and money making the process as brilliant as you can Rather ... days for example? Or points of margin? Or employee satisfaction? Nicholasbate.typepad.com © Nicholas Bate 2010 Brilliant At The Basics of Business 100: 74 Get out of the office and find out what’s...

Ngày tải lên: 06/03/2014, 19:20

... shows that the cost of capital of the firm depends on four factors: the risk free rate, the aggregate risk tolerance of the market, the expected cash flow of the firm, and the covariance of the firm’s ... b ) Clearly the cost of capital for the firm will be somewhere in between the cost of capital j for the riskless component and the cost of capital for the risky component But if the firm’s expected ... increases the variance and covariances, which increases the cost of capital The equilibrium is then the net of these two effects In our example, the overall effect decreases the cost of capital. 22...

Ngày tải lên: 06/03/2014, 21:20

... nowhere The overall stock market is the same How many people over the years have bought, then sold such stocks as Wal-Mart and Microsoft, then kicked themselves, because they spent the cash they ... need, so they reward their investors well In the United States, there are two kinds of companies which are REQUIRED to pay at least 90% of their cash to their investors One of those types of companies ... for a big profit once they retire And if they retire during a bear market like the current one, there's no guarantee they'll get nearly the money they hoped for years ago And once they sell, at...

Ngày tải lên: 09/03/2014, 02:20

... The Basics of Economics Recent titles in Basics of the Social Sciences The Basics of Western Philosophy Eugene Kelly THE BASICS OF ECONOMICS David E O’Connor Basics of the Social Sciences ... from the nation in which they reside Examples include the Mbuti Pygmies of Central Africa, the Kavango tribes of Namibia, the Nigritos of the Philippines, and the Saharias of central India The ... and never talk to them of our own necessities but of their advantages.”10 Not surprisingly, much of The Wealth of Nations is de- 17 The Basics of Economics voted to the benefits of economic freedom...

Ngày tải lên: 17/03/2014, 11:20