capital budgeting and cost analysis

《capital budgeting and cost analysis》由会员上传分享，免费在线阅读，更多相关内容在工程资料-天天文库。

1、21CapitalBudgetingandCostAnalysisLearningObjectivesAfirm’saccountantsplayanimportantrolewhenitcomestodecidingthemajorexpenditures,or1.Understandthefivestagesofcapi-investments,acompanyshouldmake.talbudgetingforaprojectAccountants,alongwithtopexecutives,havetofigureouthowand2.Useande

2、valuatethetwomainwhentobestallocatethefirm’sfinancialresourcesamongdiscountedcashflow(DCF)meth-alternativeopportunitiestocreatefuturevalueforthecompany.ods:thenetpresentvalue(NPV)Becauseit’shardtoknowwhatthefutureholdsandwhatprojectsmethodandtheinternalrate-of-return(IRR)methodwillul

3、timatelycost,thiscanbeachallengingtask,onethatcompanieslikeTargetconstantlyconfront.Tomeetthischallenge,3.UseandevaluatethepaybackandTargethasdevelopedaspecialgrouptomakeproject-relateddiscountedpaybackmethodscapitalbudgetingdecisions.Thischapterexplainsthedifferent4.Useandevaluateth

4、eaccrualmethodsmanagersusetogetthe“biggestbang”forthefirm’saccountingrate-of-return“buck”intermsoftheprojectstheyundertake.(AARR)method5.Identifyrelevantcashinflowsandoutflowsforcapitalbudgeting1decisionsTarget’sCapitalBudgetingHitstheBull’s-Eye6.UnderstandissuesinvolvedinIn2010,Targ

5、etCorporation,oneofthelargestretailersintheUnitedimplementingcapitalbudgetingStates,willspendmorethan$2billiononopeningnewstores,decisionsandevaluatingmanage-rialperformanceremodelingandexpandingexistingstores,andinvestingininformationtechnologyanddistributioninfrastructure.7.Identif

6、ystrategicconsiderationsincapitalbudgetingdecisionsWithintensecompetitionfromWal-Mart,whichfocusesonlow-prices,Target’sstrategyistoconsidertheshoppingexperienceasawhole.Withtheslogan,“Expectmore.Payless.”thecompanyisfocusedoncreatingashoppingexperiencethatappealstotheprofileofitscore

7、customer:acollege-educatedwomanwithchildrenathomewhoismoreaffluentthanthetypicalWal-Martcustomer.Thisshoppingexperienceiscreatedbyemphasizingstoredécorthatgivesjusttherightshoppingambiance.Asaresult,investmentsintheshoppingexperiencearecriticaltoTarget.Tomanagethesecomplexcapitalinve

8、stments,Targ