公司理财第九章 项目分析

,Chapter 9,Fundamentals of Corporate FinanceFifth Edition,Slides byMatthew Will,McGraw Hill/Irwin,Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved,Project Analysis,Topics Covered,How Firms Organize the Investment ProcessSome “What If” QuestionsSensitivity AnalysisScenario AnalysisBreak Even AnalysisOperating Leverage,Capital Budgeting Process,There are two important steps in the investment process: the capital budget and project authorization. They include the planning and proposals of investment, followed by evaluation and approval.,Capital Budgeting Process,Capital Budget - The list of planned investment projects. The list may be compiled from the bottom up (divisions and departments) or from the top down (strategic planning).,Capital Budgeting Process,The Decision Process1 - Develop and rank all investment projects2 - Authorize projects based on:Outlays required by law or company policyMaintenance or cost reductionCapacity expansion in existing businessInvestment for new products,Capital Budgeting Process,Capital Budgeting ProblemsConsistent forecastsTo ensure that assumptions are consistent among competing proposals is important.Conflict of interestKeeping the manager reward system consistent with shareholder returns helps eliminate conflict of interest.Forecast biasSelection criteria (NPV and others)Capital rationing techniques force divisional managers to send only the best projects forward.,How To Handle Uncertainty,Sensitivity Analysis - Analysis of the effects of changes in sales, costs, etc. on a project.The technique involves changing a single variable at a time, and examining the effect on the performance of the project. Sensitivity analysis reveals the significant variables, which, if varied or misestimated, would significantly change the NPV.Limitation: It assumes that the individual variables are independent of each other. This is usually not the case.,How To Handle Uncertainty,Scenario Analysis scenario analysis involves the changes of several variables to see the impact on NPV.scenario analysis differs from sensitivity analysis in that a particular combination of variables under specific assumptions is compared with another scenario of assumptions.Simulation Analysis - Estimation of the probabilities of different possible outcomes.,Sensitivity Analysis,ExampleGiven the expected cash flow forecasts listed on the next slide, determine the NPV of the project given changes in the cash flow components using an 8% cost of capital. Assume that all variables remain constant, except the one you are changing.,Sensitivity Analysis,Example continued (,000s),NPV= $478,Sensitivity Analysis,Example - continuedPossible Outcomes,Sensitivity Analysis,Example - continuedNPV Calculations for Pessimistic Investment Scenario,NPV= ($121),Sensitivity Analysis,Example - continuedNPV Possibilities,Scenario Analysis,Example - continuedCash Flows (years 1-12),How To Handle Uncertainty,Break Even Analysis - Analysis of the level of sales (or other variable) at which the company breaks even (where total revenue equals total expenses) . Break-even condition may be defined in terms of accounting profits or in terms of NPV.,Break Even Analysis,Accounting Break-Even Analysis Estimating the accounting break-even point level of sales of a project requires identifying the level of fixed costs and the variable cost/sales ratio related to the project.Fixed costs are the costs incurred regardless of the level of output. Variable costs are costs that vary directly with sales.,Break Even Analysis,The sales break-even point is estimated to be the fixed costs including depreciation divided by the percentage of sales contribution marginBreak-even Sales = Fixed Costs Inc. Depr. / (1 - Var. Cost / Sales),Break Even Analysis,ExampleGiven the forecasted data on the next slide, determine the number of planes that the company must produce in order to break even, on an NPV basis. The companys cost of capital is 10%.,Break Even Analysis,Break Even Analysis,Answer (Accounting)The break even point, is the # of Planes Sold where the fixed costs and depreciation = $0.,EVA & Break Even,A project that just breaks even in accounting income terms will have a negative NPV because it does not consider the cost of capital. Economic Value Added measures the economic profit or profit in excess of all costs including the required rate of return to capital. Positive EVA adds value to the firm.EVA = Economic profit = Accounting profit Opportunity cost of capital,Break Even Analysis,The economic break-even point is the level of sales from a project needed to generate a zero NPV.( or an internal rate of return that equals the opportunity rate of return of investors.)The sales level that produces an NPV of zero is always higher than the sales level for the accounting break-even point.,EVA & Break Even,To find the economic break even point Solve the annual annuity received over n years at opportunity cost r: Annual annuity = Initial inv. / PVAFr,n Find the sales that generates zero NPV:(1 tax rate) (sales x contribution margin fixed costs & dep.) (annual annuity dep. Per year) = 0 Sales = ?,EVA & Break Even,Superstores EVA (p196),Sales = $15.4mil.,Break Even Analysis,EVA & Break Even,EVA = accounting profit additional cost of capital = 0,($3.5 x planes sold - $162.50) - $56.6 = 0,Planes sold = 219.1 / 3.5 = 62.6,Additional cost of capital = annual annuity depreciation = (initial inv. / annuity factor) dep. = 900mil. / 4.355 150mil. = 56.6mil.,Break Even Analysis,Answer (Finance)The break even point, is the # of Planes Sold that generates a NPV=$0. The present value annuity factor of a 6 year cash flow at 10% is 4.355Thus,AnswerSolving for “Planes Sold”,Break Even Analysis,Operating Leverage,Operating Leverage- A project with fixed costs is said to have operating leverage. Operating leverage is concerned with the relationship between the firms sales revenue and its profit before interest and taxes. * Result of using operating leverage: magnify the firms profit before interest and taxes.,Operating Leverage,Degree of Operating Leverage (DOL) - Percentage change in profits given a 1 percent change in sales. It is used to Measure the extent of operating leverage. * Definitional formula:,Operating Leverage,Computational formula: * DOL = 1 + fixed costs/profits * DOLat x = (sales varieble cost) / PBIT x: the starting point of sale DOL depends on fixed charges