capitalbudgeting(ppt47)英文版-it(編輯修改稿)
2024-09-22 10:54 本頁(yè)面
【文章內(nèi)容簡(jiǎn)介】 rate of return, present value, internal rate of return, and economic value added relate to capital budgeting. 8 21 ? 2020 Prentice Hall Business Publishing Management Accounting, 3/E, Atkinson, Banker, Kaplan, and Young Approaches to Capital Budgeting – Payback – Accounting rate of return – Net present value – Internal rate of return – Profitability index – Economic value added 8 22 ? 2020 Prentice Hall Business Publishing Management Accounting, 3/E, Atkinson, Banker, Kaplan, and Young Approaches to Capital Budgeting ?Shirley’s Doughnut Hole is considering the purchase of a new machine that will cost $70,000 and last five years. ?Its salvage value is $10,000. ?The machine will increase profits by $20,000 per year. ?The cost of capital is 10%. ?Is this investment worthwhile? 8 23 ? 2020 Prentice Hall Business Publishing Management Accounting, 3/E, Atkinson, Banker, Kaplan, and Young Payback Criterion ?The payback period, or payback criterion, putes the number of periods needed to recover a project’s initial investment. Payback time = 70,000 247。 20,000 = years 8 24 ? 2020 Prentice Hall Business Publishing Management Accounting, 3/E, Atkinson, Banker, Kaplan, and Young Accounting Rate of Return Criterion ?The accounting rate of return approximates the return of investment. Accounting Rate of Return = Average Ine 247。 Average Investment 8 25 ? 2020 Prentice Hall Business Publishing Management Accounting, 3/E, Atkinson, Banker, Kaplan, and Young Accounting Rate of Return Criterion ?What is the straightline method annual depreciation? ?($70,000 – $10,000) 247。 5 = $12,000 ?What is the increased annual ine? ?$20,000 – $12,000 = $8,000 ?What is the average investment? ?($70,000 + $10,000) 247。 2 = $40,000 8 26 ? 2020 Prentice Hall Business Publishing Management Accounting, 3/E, Atkinson, Banker, Kaplan, and Young Accounting Rate of Return Criterion ?What is the accounting rate of return? ?ARR = $8,000 247。 $40,000 = 20% ?If the accounting rate of return exceeds the criterion, or target rate of return, the project is acceptable. ?The accounting rate of return does not consider the explicit timing of cash flows. 8 27 ? 2020 Prentice Hall Business Publishing Management Accounting, 3/E, Atkinson, Banker, Kaplan, and Young Net Present Value Criterion ?The present value is the sum of the present values of all cash inflows and outflows associated with a project. ?This model is the most widely remended approach to capital budgeting. ?It specifically considers the time value of money. 8 28 ? 2020 Prentice Hall Business Publishing Management Accounting, 3/E, Atkinson, Banker, Kaplan, and Young Net Present Value Criterion ?What are the steps in puting NPV? 1 Choose the period length. 2 Identify the firm’s cost of capital. 3 Identify the incremental cash flows. 4 Compute the PV of the cash flows. 5 Sum the project’s cash flows and determine the NPV. 6 Accept or reject the project. 8 29 ? 2020 Prentice Hall Business Publishing Management Accounting, 3/E, Atkinson, Banker, Kaplan, and Young Net Present Value Criterion Periods Amount PV Factor Present Value 0 ($70,000) ($70,)
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