财务管理培训课件lecture7(ch7)

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7- 11
Inflation
Example - real figures
Y ear 1 2 3 4
C ash F lo w
8000 1 .0 3
=
7 7 6 6 .9 9
8240 1 .0 3 2
=
7 7 6 6 .9 9
8 4 8 7 .2 0 1 .0 3 3
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7- 4
Cash Flow vs. Accounting Income
C ash In co m e D ep reciatio n A cco u n tin g In co m e
Y ear 1 $1500 -$1000 + 500
nominal cash flows. Use real interest rates to discount real cash
flows. You will get the same results, whether you
use nominal or real figures
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Decisions Example: Blooper Industries
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7- 3
Cash Flow vs. Accounting Income
Discount actual cash flows Using accounting income, rather than cash flow,
1 ,1 3 7 2 ,1 1 3
3
4 ,4 9 3 214
1 6 ,5 3 8 1 1,0 2 5 2 ,0 0 0 3 ,5 1 3 1,2 3 0 2 ,2 8 3
4
5
6
4 ,7 1 7 225
1 7 ,3 6 4 1 1 ,5 7 6 2 ,0 0 0 3 ,7 8 8 1,3 2 6 2 ,4 6 2
Y ear 2 $ 500 -$1000 - 500
A c c o u n tin g N P V = 1 5 .0 1 0 0 ( 1 .1 5 0 0 ) 0 2 $ 4 1 .3 2
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7- 15
Blooper Industries
Net Cash Flow (entire project) (,000s)
C ap In v est C h an g e in W C C F from O p N et C ash F lo w
= - Incremental
Cash Flow
caБайду номын сангаасh flow with project
cash flow without project
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7- 7
Incremental Cash Flows
Inflation
Example - nominal figures
Y ear 1 2 3 4
C ash F low 8000 8 0 0 0 x 1 .0 3 = 8 2 4 0 8 0 0 0 x 1 .0 32 = 8 2 4 0 8 0 0 0 x 1 .0 33 = 8 4 8 7 .2 0
7- 5
Cash Flow vs. Accounting Income
C ash In co m e P ro ject C o st F ree C ash F lo w
T oday
-2000 -2000
Y ear 1 $1500
+ 1500
Y ear 2 $ 500
+ 500
C a sh N P V = -1 2 .0 1 0 0 0 (1 1 .5 1 0 0 0 )2 (1 5 .1 0 0 0 )3 $ 2 2 3 .1 4
PV @ 10%
8000 1 .1 0
7 2 7 2 .7 3
8240 1 .1 0 2
6 8 0 9 .9 2
8487 .20 1 .1 0 3
6 3 7 6 .5 6
8 7 4 1.8 2 1 .1 0 4
5 9 7 0 .7 8
$ 2 6 ,4 2 9 .9 9
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3 ,0 3 9 1,6 7 8 1 8 ,2 3 3 1 2 ,1 5 5
2 ,0 0 0 4 ,0 7 8 1,4 2 7 2 ,6 5 1
0 3 ,0 3 9
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7- 14
Blooper Industries
Cash Flow From Operations (,000s)
Y ear 0 - 1 0 ,0 0 0
- 1 ,5 0 0
- 1 1 ,5 0 0
1
- 2 ,5 7 5 3 ,9 5 0 1 ,3 7 5
2
-204 4 ,1 1 3 3 ,9 0 9
3
-214 4 ,2 8 3 4 ,0 6 9
4
-225 4 ,4 6 2 4 ,2 3 7
6 3 7 6 .5 6
7 7 6 6 .9 9 1.0 6 8 4
5 9 7 0 .7 8
= $ 2 6 ,4 2 9 .9 9
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7-12 Separation of Investment & Financing Decisions
Y ear 0 1 0 ,0 0 0
1 ,5 0 0 1 ,5 0 0
(,000s)
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1
4 ,0 7 5 2 ,5 7 5 1 5 ,0 0 0 1 0 ,0 0 0 2 ,0 0 0 3 ,0 0 0 1,0 5 0 1,9 5 0
2
4 ,2 7 9 204
1 5 ,7 5 0 1 0 ,5 0 0 2 ,0 0 0 3 ,2 5 0
7-F1 undamentals of Corporate Finance
Third Edition
Chapter 7
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Using Discounted Cash Flow Analysis to Make Investment Decisions
Brealey Myers Marcus
Revenues
15,000
- Expenses
10,000
Depreciation
2 ,0 0 0
= Profit before tax
3,000
.-Tax @ 35 %
1,0 5 0
= Net profit
1,9 5 0
+ Depreciation
2 ,0 0 0
= C F fro m o p eratio n s 3,9 5 0 or $3,950,000
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7- 6
Incremental Cash Flows
Discount incremental cash flows Include All Indirect Effects Forget Sunk Costs Include Opportunity Costs Recognize the Investment in Working Capital Beware of Allocated Overhead Costs
When valuing a project, ignore how the project is financed.
Following the logic from incremental analysis ask yourself the following question: Is the project existence dependent on the financing? If no, you must separate financing and investment decisions.
IMPORTANT Ask yourself this question
Would the cash flow still exist if the project does not exist?
If yes, do not include it in your analysis. If no, include it.
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7- 9
Inflation
Example You own a lease that will cost you $8,000 next year, increasing at 3% a year (the forecasted inflation rate) for 3 additional years (4 years total). If discount rates are 10% what is the present value cost of the lease?