thebasicsofcapitalbudgeting(英文版)-全文預(yù)覽
【正文】 All rights reserved. What’s Project L’s IRR? 10 80 60 0 1 2 3 IRR = ? PV3 PV2 PV1 0 = NPV Enter CFs in CFLO, then press IRR: IRRL = %. IRRS = %. 11 21 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. Using NPV method, which project(s) should be accepted? ?If Projects S and L are mutually exclusive, accept S because NPVs NPVL . ?If S L are independent, accept both。 2023 by Harcourt, Inc. All rights reserved. ? ? .k1CFNPVttn0t ?? ??NPV: Sum of the PVs of inflows and outflows. 11 14 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. Payback for Project L (Long: Large CFs in later years) 10 60 0 1 2 3 100 = CFt Cumulative 100 90 30 50 PaybackL 2 + 30/80 = years 0 100 80 11 10 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. An Example of Mutually Exclusive Projects BRIDGE vs. BOAT to get products across a river. 11 6 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. What is capital budgeting? ?Analysis of potential additions to fixed assets. ?Longterm decisions。 2023 by Harcourt, Inc. All rights reserved. Should we build this plant? CHAPTER 11 The Basics of Capital Budgeting 11 2 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. What is the difference between independent and mutually exclusive projects? Projects are: 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. 11 5 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. What is the payback period? The number of years required to recover a project’s cost, or how long does it take to get our money back? 11 9 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. Discounted Payback: Uses discounted rather than raw CFs. 10 80 60 0 1 2 3 CFt Cumulative 100 Discounted payback 2 + PVCFt 100 100 10% = Recover invest. + cap. costs in years. 11 13 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. Rationale for the NPV Method NPV =
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