Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Chapter 7:
Capital Budgeting Decisions
Slides Prepared by: Scott Peterson Northern State University
Learning Objectives:
1.
Its all about rates of return. Cash inflows and outflows are NOT the same as revenues and expenses. A dollar today is worth more than a dollar tomorrow.
2.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes. More
Learning Objectives:
5.
Its all about rates of return. Cash inflows and outflows are NOT the same as revenues and expenses. A dollar today is worth more than a dollar tomorrow.
6.
Use the payback period and the accounting rate of return methods to evaluate investment opportunities. Explain why managers may concentrate erroneously on the short-run profitability of investments rather than their net present values.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
2.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
2.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
2.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
2.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
2.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
2.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
2.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
2.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
2.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
2.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
2.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
3.
4.
Define capital expenditure decisions and capital budgets. Evaluate investment opportunities using the net present value approach. Evaluate investment opportunities using the internal rate of return approach. Calculate the depreciation tax shield, and explain why depreciation is important in investment analysis only because of income taxes.
6.
Use the payback period and the accounting rate of return methods to evaluate investment opportunities. Explain why managers may concentrate erroneously on the short-run profitability of investments rather than their net present values.
6.
Use the payback period and the accounting rate of return methods to evaluate investment opportunities. Explain why managers may concentrate erroneously on the short-run profitability of investments rather than their net present values.
6.
Use the payback period and the accounting rate of return methods to evaluate investment opportunities. Explain why managers may concentrate erroneously on the short-run profitability of investments rather than their net present values.
6.
Use the payback period and the accounting rate of return methods to evaluate investment opportunities. Explain why managers may concentrate erroneously on the short-run profitability of investments rather than their net present values.
Explain how the internal rate of return is calculated when there are uneven cash flows.
Copyright
2001 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.