公司理财第十章.pptx

Chapter 10Making Capital Investment DecisionsMcGraw-Hill/IrwinCopyright ? 2010 by The McGraw-Hill Companies, Inc. All rights reserved. Key Concepts and SkillsUnderstand how to determine the relevant cash flows for various types of proposed investmentsUnderstand the various methods for computing operating cash flowUnderstand how to set a bid price for a projectUnderstand how to evaluate the equivalent annual cost of a project10-2 Chapter OutlineProject Cash Flows: A First LookIncremental Cash FlowsPro Forma Financial Statements and Project Cash FlowsMore about Project Cash FlowAlternative Definitions of Operating Cash FlowSome Special Cases of Discounted Cash Flow Analysis10-3 Relevant Cash FlowsThe cash flows that should be included in a capital budgeting analysis are those that will only occur (or not occur) if the project is acceptedThese cash flows are called incremental cash flowsThe stand-alone principle allows us to analyze each project in isolation from the firm simply by focusing on incremental cash flows10-4 Asking the Right QuestionYou should always ask yourself “Will this cash flow occur ONLY if we accept the project?”If the answer is “yes,” it should be included in the analysis because it is incrementalIf the answer is “no,” it should not be included in the analysis because it will occur anywayIf the answer is “part of it,” then we should include the part that occurs because of the project10-5 Common Types of Cash FlowsSunk costs – costs that have accrued in the pastOpportunity costs – costs of lost optionsSide effectsPositive side effects – benefits to other projectsNegative side effects – costs to other projectsChanges in net working capitalFinancing costsTaxes10-6 Pro Forma Statements and Cash FlowCapital budgeting relies heavily on pro forma accounting statements, particularly income statementsComputing cash flows – refresherOperating Cash Flow (OCF) = EBIT + depreciation – taxesOCF = Net income + depreciation (when there is no interest expense)Cash