财务管理第十章.ppt

单击此处编辑母版标题样式,单击此处编辑母版文本样式,第二级,第三级,第四级,第五级,PPT,文档演模板,Office,PPT,08 十一月 2026,财务管理第十章,After Studying Chapter 10,you should be able to:,Define capital budgeting and identify the steps involved in the capital budgeting process.,Explain the procedure to generate long-term project proposals within the firm.,Justify why cash,not income,flows are the most relevant to capital budgeting decisions.,Define the terms“sunk cost”and“opportunity cost”and explain why sunk costs must be ignored,while opportunity costs must be included,in capital budgeting analysis.,Determine initial,interim,and terminal period“after-tax,incremental,operating cash flows”associated with a capital investment project.,Capital Budgeting and Estimating Cash Flows,The Capital Budgeting Process,Generating Investment Project Proposals,Estimating Project“After-Tax Incremental Operating Cash Flows”,What is Capital Budgeting?,The process of identifying,analyzing,and selecting investment projects whose returns(cash flows)are expected to extend beyond one year.,The Capital Budgeting Process,Generate investment proposals consistent with the firms strategic objectives.,Estimate after-tax incremental operating cash flows for the investment projects.,Evaluate project incremental cash flows.,The Capital Budgeting Process,Select projects based on a value-maximizing acceptance criterion.,Reevaluate implemented investment projects continually and perform postaudits for completed projects.,Classification of Investment Project Proposals,1.New products or expansion of existing products,2.Replacement of existing equipment or buildings,3.Research and development,4.Exploration,5.Other(e.g.,safety or pollution related),Screening Proposals and Decision Making,1.Section Chiefs,2.Plant Managers,3.VP for Operations,4.Capital Expenditures Committee,5.President,6.Board of Directors,Advancement,to the next,level depends,on cost,and strategic,importance.,Estimating After-Tax Incremental Cash Flows,Cash,(not accounting income),flows,Operating,(not financing),flows,After-tax flows,Incremental flows,Basic characteristics of relevant project flows,Estimating After-Tax Incremental Cash Flows,Ignore,sunk costs,Include,opportunity costs,Include,project-driven,changes in working capital,net of spontaneous changes in current liabilities,Include,effects of inflation,Principles that must be adhered to in the estimation,Calculating the Incremental Cash Flows,Initial cash outflow,the initial net cash investment.,Interim incremental net cash flows,those net cash flows occurring after the initial cash investment but not including the final periods cash flow.,Terminal-year incremental net cash flows,the final periods net cash flow.,Initial Cash Outflow,a),Cost of“new”assets,b)+Capitalized expenditures,c)+()Increased(decreased)NWC,d)Net proceeds from sale of “old”asset(s)if replacement,e)+()Taxes(savings)due to the sale of“old”asset(s)if replacement,f),=,Initial cash,outflow,Incremental Cash Flows,a)Net incr.(decr.)in operating revenue less(plus)any net incr.(decr.)in operating expenses,excluding depr.,b)(+)Net incr.(decr.)in tax depreciation,c)=Net change in income before taxes,d)(+)Net incr.(decr.)in taxes,e)=Net change in income after taxes,f)+()Net incr.(decr.)in tax depr.charges,g),=,Incremental net cash flow for period,Terminal-Year Incremental Cash Flows,a)Calculate the,incremental net cash flow,for the,terminal period,b)+()Salvage value(disposal/reclamation costs)of any sold or disposed assets,c)(+)Taxes(tax savings)due to asset sale or disposal of“new”assets,d)+()Decreased(increased)level of“net”working capital,e),=Terminal year incremental net cash flow,Example of an Asset Expansion Project,Basket Wonders(BW)is considering the purchase of a new basket weaving machine.The machine will cost$50,000 plus$20,000 for shipping and installation and falls under the 3-year MACRS class.NWC will rise by$5,000.Lisa Miller forecasts that revenues will increase by$110,000 for each of the next 4 years and will then be sold(scrapped)for$10,000 at the end of the fourth year,when the project ends.Operating costs will rise by$70,000 for each of the next four years.BW is in the 40%tax bracket.,Initial Cash Outflow,a)$50,000,b)+20,000,c)+5,000,d)0 (not a replacement),e)+()0 (not a replacement),f),=,$75,000*,*Note that we have calculated this value as a“positive”because it is a cash,OUTFLOW,(negative).,Incremental Cash Flows,Year 1,Year 2,Year 3,Year 4,a)$40,000$40,000$40,000$40,000,b)23,331 31,115 10,367 5,187,c)=$16,669$8,885$29,633$34,813,d)6,668 3,554 11,853 13,925,e)=$10,001$5,331$17,780$20,888,f)+23,331 31,115 10,367 5,187,g),=,$33,332$36,446$28,147$26,075,Terminal-Year Incremental Cash Flows,a),$26,075,The,incremental cash flow,from the previous slide in Year 4.,b)+10,000Salvage Value.,c)4,000.40*($10,000-0)Note,the asset is fully depreciated at the end of Year 4.,d)+5,000NWC-Project ends.,e),=$37,075Terminal-year incremental cash flow.,