'Initial outlay' presentation slideshows

Chapter 9 - Capital Budgeting Decision Criteria

Chapter 9 - Capital Budgeting Decision Criteria. Capital Budgeting : The process of planning for purchases of long-term assets. For example : Suppose our firm must decide whether to purchase a new plastic molding machine for $125,000. How do we decide? Will the machine be profitable ?

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Capital Budgeting

Capital Budgeting. For 9.220. Outline. Introduction Net Present Value (NPV) Payback Period Rule (PP) Discounted Payback Period Rule Average Accounting Return (AAR) Internal Rate of Return Rule (IRR) Profitability Index Rule (PI) Special Situations Mutually Exclusive, Differing Scales

649 views • 49 slides

Capital Budgeting

Capital Budgeting. For 9.220. Outline. Introduction Net Present Value (NPV) Payback Period Rule (PP) Discounted Payback Period Rule Average Accounting Return (AAR) Internal Rate of Return Rule (IRR) Profitability Index Rule (PI) Special Situations Mutually Exclusive, Differing Scales

553 views • 49 slides

Multinational Capital Budgeting

3.36k views • 34 slides

Capital Budgeting Criteria for Investments Projects Mutually Exclusive versus Independent Project

Chapter 6. Capital Budgeting Criteria for Investments Projects Mutually Exclusive versus Independent Project. Mutually Exclusive Projects: only ONE of several potential projects can be chosen, e.g. acquiring an accounting system. RANK all alternatives and select the best one.

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Case 11: If The Coat Fits Wear It

Case 11: If The Coat Fits Wear It. Case Discussion. Objectives. Analyzing replacement projects Estimating relevant cash flows. Background Information. The Innovative Sporting Goods Company (ISGC) had developed a sound technique of making baseball bats.

1.13k views • 28 slides

Capital Budgeting (I): Different Approaches (Ch 9) Net Present Value The Payback Rule

Capital Budgeting (I): Different Approaches (Ch 9) Net Present Value The Payback Rule The Discounted Payback The Average Accounting Return The Internal Rate of Return The Profitability Index The Practice of Capital Budgeting. Capital Budgeting (I): Ch 9. 1.

591 views • 21 slides

Chapter 9

Chapter 9. Capital Budgeting : the process of planning for purchases of long-term assets. example : Suppose our firm must decide whether to purchase a new plastic molding machine for $125,000. How do we decide? Will the machine be profitable ?

308 views • 18 slides

WHAT TO DISCOUNT

WHAT TO DISCOUNT. 1. Only cash flow is relevant. 2. Estimate incremental(after tax) cash flow. 3. Be consistent in treatment of inflation. 4. Recognize project interactions. Capital Budgeting: New vs Replacement. 1. INITIAL OUTLAY 2. CASH FLOWS 3. TERMINAL CASH FLOW 1. INITIAL OUTLAY:

205 views • 8 slides