《公司理财》相关资料英文版).ppt

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1、MakingCapitalInvestmentDecisionsChapter8KeyConceptsandSkillsUnderstandhowtodeterminetherelevantcashflowsforvarioustypesofcapitalinvestmentsBeabletocomputedepreciationexpensefortaxpurposesIncorporateinflationintocapitalbudgetingUnderstandthevariousmethodsforcomputingoperatingcashflow

2、ApplytheEquivalentAnnualCostapproachChapterOutline8.1IncrementalCashFlows8.2TheBaldwinCompany:AnExample8.3InflationandCapitalBudgeting8.4AlternativeDefinitionsofCashFlow8.5InvestmentsofUnequalLives:TheEquivalentAnnualCostMethod8.1IncrementalCashFlowsCashflowsmatter—notaccountingearn

3、ings.Sunkcostsdon’tmatter.Incrementalcashflowsmatter.Opportunitycostsmatter.Sideeffectslikecannibalismanderosionmatter.Taxesmatter:wewantincrementalafter-taxcashflows.Inflationmatters.CashFlows—NotAccountingConsiderdepreciationexpense.Youneverwriteacheckmadeoutto“depreciation.”Mucho

4、ftheworkinevaluatingaprojectliesintakingaccountingnumbersandgeneratingcashflows.IncrementalCashFlowsSunkcostsarenotrelevantJustbecause“wehavecomethisfar”doesnotmeanthatweshouldcontinuetothrowgoodmoneyafterbad.Opportunitycostsdomatter.JustbecauseaprojecthasapositiveNPV,thatdoesnotmea

5、nthatitshouldalsohaveautomaticacceptance.Specifically,ifanotherprojectwithahigherNPVwouldhavetobepassedup,thenweshouldnotproceed.IncrementalCashFlowsSideeffectsmatter.Erosionandcannibalismarebothbadthings.Ifournewproductcausesexistingcustomerstodemandlessofcurrentproducts,weneedtore

6、cognizethat.If,however,synergiesresultthatcreateincreaseddemandofexistingproducts,wealsoneedtorecognizethat.EstimatingCashFlowsCashFlowfromOperationsRecallthat:OCF=EBIT–Taxes+DepreciationNetCapitalSpendingDon’tforgetsalvagevalue(aftertax,ofcourse).ChangesinNetWorkingCapitalRecalltha

7、twhentheprojectwindsdown,weenjoyareturnofnetworkingcapital.InterestExpenseLaterchapterswilldealwiththeimpactthattheamountofdebtthatafirmhasinitscapitalstructurehasonfirmvalue.Fornow,it’senoughtoassumethatthefirm’slevelofdebt(and,hence,interestexpense)isindependentoftheprojectathand.

8、8.2TheBaldwinCompan