Capital investment appraisal 3

... the technical and economic feasibility of the project, cash flows etc Investment Appraisal Process Stages: decide which one to undertake authorisation and implementation review and monitor: learn ... Diversification for risk reduction Need for Investment Appraisal Large amount of resources are involved and wrong decisions could be costly Difficult and expensive to reverse...

Ngày tải lên: 04/10/2015, 19:55

... Session Capital Investment Appraisal • By the end of today’s session(s), you should be able to: – Understand the context of investment appraisal decisions – Evaluate capital projects ... Average capital invested Where the average annual profit is the total profit for the whole period (after depreciation) divided by the life of the investment in years; and The average capital...

Ngày tải lên: 04/10/2015, 19:55

... Jones, 20 02, p 4 52 Business Accounting The capital investment decision  Capital investment appraisal techniques are used for making decisions concerning the investment of large amount of capital ... Exercise Capital investment decisions Business Accounting Exercise Capital investment decisions Business Accounting Solution Capital investment decisions Business Ac...

Ngày tải lên: 04/10/2015, 19:56

... maximize the firm’s wealth Basic techniques of making capital investment appraisal for evaluating proposed capital investment projects Investment appraisal methods Considering the time value of money ... = Average investment cost Total profit Average net profit per year = No of life of the project Initial investment Average investment cost = 48 Acceptance criterion In eval...

Ngày tải lên: 04/10/2015, 19:56

... Capital investment appraisal Capital investment involves the sacrifice of current funds in order to obtain the benefit ... required Capital investment is long-term and the recoupment of investment may involve a significant period of time Factors to consider in assessing capital projects The size of the investment ... regarding the projected cash flows The working capital...

Ngày tải lên: 04/10/2015, 19:56

... Concept of Capital Budgeting  Capital Expenditure Budget  Importance of Capital Budgeting  Rational of Capital Expenditure  Kinds of Capital Investment Proposals  Factors affecting Investment ... affecting Investment Decision  Investment Appraisal Methods  Capital Rationing Concept of Capital Budgeting  Finance Manager is concerned with Planning and Fin...

Ngày tải lên: 04/10/2015, 19:55

... (international business and management) II- The method of investment appraisal which may be applied to evaluated and rank potential investment opportunities and their relative merits and limitations In ... places together with the potential effects of a takeover Then, I will give four method of investment appraisal to evaluated...

Ngày tải lên: 17/02/2014, 13:02

... internal rate of return 18 INVESTMENT APPRAISAL ‘‘Forecasts can be injurious to your wealth.’’ Dean LeBaron, b.1933, investment manager The final step of investment appraisal is the financial calculation ... cultures.’’ Investment appraisal and return on investment calculations have cultural differences across the globe International companies need to build this into their inve...

Ngày tải lên: 18/02/2014, 07:20

Ngày tải lên: 07/03/2014, 02:20

... TwoŠPeriod Investment Project + B1 B2 K - Year Calculating Net Present Value NPV = -K + B1[1/(1+r1] + B2[1/(1+r1][1/(1+r2] Assume r1 = r2 = r: NPV = -K + B1[1/(1+r)] + B2[1/(1+r) ]2 IRR: Solve ... of Return, IRR = MPK - = [BC/AC] > r, hence undertake the project To solve for IRR choose rP to set BC[1/(1+rP)] - AC = ie IRR = [BC/AC] -1 Figure 2. 2 : A Country’s Inter-tempor...

Ngày tải lên: 20/11/2014, 17:52

... 0) = $10, 200 10- 18 Example: Seven-Year MACRS Year MACRS Percent D 1429 1429( 110, 000) = 15,719 2449 2449( 110, 000) = 26,939 1749 1749( 110, 000) = 19,239 1249 1249( 110, 000) = 13,739 0893 0893( 110, 000) ... 17,000 10- 17 Example: Three-year MACRS Year MACRS percent D 3333 3333( 110, 000) = 36,663 4445 4445( 110, 000) = 48,895 1481 1481( 110, 000) = 16,291 0741 0741( 110, 000) = 8,151...

Ngày tải lên: 23/03/2015, 17:09

... Networks The dominant approach in VC research, the financial approach, views VC investment similar to institutional investment in the public market with returns and risk as main factors in investment ... One venture capitalist stated his overseas investment strategy in the interview in this way, Singapore companies are our main focus, and we may also invest in their...

Ngày tải lên: 16/09/2015, 08:30

... Affecting Affecting Investment Investment Decisions Decisions Additional factors impacting on investment criteria calculations are: the effect of inflation on the cost of capital working capital requirements ... a capital investment project Project Project Appraisal Appraisal Factors Factors Used Used in in Sensitivity Sensitivity Analysis Analysis Control Control of of Capital...

Ngày tải lên: 04/10/2015, 19:57

Ngày tải lên: 04/10/2015, 20:07

... average past, projections… – Investment may take place over several periods Lecture III: Investment Appraisal 13 Financing & Investment Decisions • The financing and investment decisions are treated ... used Lecture III: Investment Appraisal A Project Proposal • Cash Flow: – CF1 = 1100 and CF2 = 1210 • KC = 2100 • R = 10% • Should you invest? • 2310 > 2100 Lecture III: Inve...

Ngày tải lên: 04/10/2015, 20:07