财务管理ch06资本预算

Chapter06,CapitalBudgetingTechniques资本预算方法,ProjectEvaluation:AlternativeMethods,PaybackPeriod(PBP投资回收期)InternalRateofReturn(IRR内含报酬率)NetPresentValue(NPV净现值)ProfitabilityIndex(PI获利指数),ProposedProjectData,JulieMillerisevaluatinganewprojectforherfirm,BasketWonders(BW).Shehasdeterminedthattheafter-taxcashflowsfortheprojectwillbe$10,000;$12,000;$15,000;$10,000;and$7,000,respectively,foreachoftheYears1through5.Theinitialcashoutlaywillbe$40,000.,IndependentProject,Independent-Aprojectwhoseacceptance(orrejection)doesnotpreventtheacceptanceofotherprojectsunderconsideration.,Forthisproject,assumethatitisindependentofanyotherpotentialprojectsthatBasketWondersmayundertake.,PaybackPeriod(PBP),PBPistheperiodoftimerequiredforthecumulativeexpectedcashflowsfromaninvestmentprojecttoequaltheinitialcashoutflow.,012345,-40K10K12K15K10K7K,(c),10K22K37K47K54K,PaybackSolution(#1),PBP=a+(b-c)/d=3+(40-37)/10=3+(3)/10=3.3Years,012345,-40K10K12K15K10K7K,CumulativeInflows,(a),(-b),(d),PaybackSolution(#2),PBP=3+(3K)/10K=3.3YearsNote:Takeabsolutevalueoflastnegativecumulativecashflowvalue.,CumulativeCashFlows,-40K10K12K15K10K7K,012345,-40K-30K-18K-3K7K14K,PBPAcceptanceCriterion,Yes!Thefirmwillreceivebacktheinitialcashoutlayinlessthan3.5years.3.3Years3.5YearMax.,ThemanagementofBasketWondershassetamaximumPBPof3.5yearsforprojectsofthistype.Shouldthisprojectbeaccepted?,PBPStrengthsandWeaknesses,Strengths:EasytouseandunderstandCanbeusedasameasureofliquidity,Weaknesses:DoesnotaccountforTVMDoesnotconsidercashflowsbeyondthePBP,InternalRateofReturn(IRR),IRRisthediscountratethatequatesthepresentvalueofthefuturenetcashflowsfromaninvestmentprojectwiththeprojectsinitialcashoutflow.,CF1CF2CFn,(1+IRR)1(1+IRR)2(1+IRR)n,+.+,+,ICO=,$15,000$10,000$7,000,IRRSolution,$10,000$12,000,(1+IRR)1(1+IRR)2,Findtheinterestrate(IRR)thatcausesthediscountedcashflowstoequal$40,000.,+,+,+,+,$40,000=,(1+IRR)3(1+IRR)4(1+IRR)5,IRRSolution(Try10%),$40,000=$10,000(PVIF10%,1)+$12,000(PVIF10%,2)+$15,000(PVIF10%,3)+$10,000(PVIF10%,4)+$7,000(PVIF10%,5)=$10,000(.909)+$12,000(.826)+$15,000(.751)+$10,000(.683)+$7,000(.621)=$9,090+$9,912+$11,265+$6,830+$4,347=$41,444Rateistoolow!,IRRSolution(Try15%),$40,000=$10,000(PVIF15%,1)+$12,000(PVIF15%,2)+$15,000(PVIF15%,3)+$10,000(PVIF15%,4)+$7,000(PVIF15%,5)=$10,000(.870)+$12,000(.756)+$15,000(.658)+$10,000(.572)+$7,000(.497)=$8,700+$9,072+$9,870+$5,720+$3,479=$36,841Rateistoohigh!,.10$41,444.05IRR$40,000$4,603.15$36,841($1,444)(0.05)$4,603,IRRSolution(Interpolate),$1,444,X,X=,X=.0157,IRR=.10+.0157=.1157or11.57%,X/.05=1444/4603,IRRAcceptanceCriterion,No!Thefirmwillreceive11.57%foreachdollarinvestedinthisprojectatacostof13%.IRRHurdleRate,ThemanagementofBasketWondershasdeterminedthatthehurdlerateis13%forprojectsofthistype.Shouldthisprojectbeaccepted?,IRRStrengthsandWeaknesses,Strengths:AccountsforTVMConsidersallcashflowsLesssubjectivity,Weaknesses:AssumesallcashflowsreinvestedattheIRRDifficultieswithprojectrankingsandMultipleIRRs,NetPresentValue(NPV),NPVisthepresentvalueofaninvestmentprojectsnetcashflowsminustheprojectsinitialcashoutflow.,CF1CF2CFn,(1+k)1(1+k)2(1+k)n,+.+,+,-ICO,NPV=,BasketWondershasdeterminedthattheappropriatediscountrate(k)forthisprojectis13%.,$10,000$7,000,NPVSolution,$10,000$12,000$15,000,(1.13)1(1.13)2(1.13)3,+,+,+,-$40,000,(1.13)4(1.13)5,NPV=,+,NPVSolution,NPV=$10,000(PVIF13%,1)+$12,000(PVIF13%,2)+$15,000(PVIF13%,3)+$10,000(PVIF13%,4)+$7,000(PVIF13%,5)-$40,000NPV=$10,000(.885)+$12,000(.783)+$15,000(.693)+$10,000(.613)+$7,000(.543)-$40,000NPV=$8,850+$9,396+$10,395+$6,130+$3,801-$40,000=-$1,428,NPVAcceptanceCriterion,No!TheNPVisnegative.Thismeansthattheprojectisreducingshareholderwealth.RejectasNPV,Method#2:,Method#1:,PIAcceptanceCriterion,No!ThePIislessthan1.00.Thismeansthattheprojectisnotprofitable.RejectasPI1.00,PI=$38,572/$40,000=.9643(Method#1,13-34)Shouldthisprojectbeaccepted?,PIStrengthsandWeaknesses,Strengths:SameasNPVAllowscomparisonofdifferentscaleprojects,Weaknesses:SameasNPVProvidesonlyrelativeprofitabilityPotentialRankingProblems,EvaluationSummary,BasketWondersIndependentProject,OtherProjectRelationships,MutuallyExclusive-Aprojectwhoseacceptanceprecludestheacceptanceofoneormorealternativeprojects.,Dependent-Aprojectwhoseacceptancedependsontheacceptanceofoneormoreotherprojects.,PotentialProblemsUnderMutualExclusivity,A.ScaleofInvestmentB.Cash-flowPatternC.ProjectLife,Rankingofprojectproposalsmaycreatecontradictoryresults.,A.ScaleDifferences,Compareasmall(S)andalarge(L)project.,NETCASHFLOWS,ProjectSProjectL,ENDOFYEAR,0-$100-$100,000,100,2$400$156,250,ScaleDifferences,CalculatethePBP,IRR,NPV10%,andPI10%.Whichprojectispreferred?Why?ProjectIRRNPVPI,S100%$2313.31L25%$29,1321.29,B.CashFlowPattern,Letuscompareadecreasingcash-flow(D)projectandanincreasingcash-flow(I)project.,NETCASHFLOWS,ProjectDProjectI,ENDOFYEAR,0-$1,200-$1,200,11,000100,2500600,31001,080,D23%$1981.17I17%$1981.17,CashFlowPattern,CalculatetheIRR,NPV10%,andPI10%.Whichprojectispreferred?ProjectIRRNPVPI,?,ExamineNPVProfiles,DiscountRate(%),0510152025,-2000200400600,IRR,NPV10%,PlotNPVforeachprojectatvariousdiscountrates.,NetPresentValue($),ProjectI,ProjectD,FishersRateofIntersection,DiscountRate($),0510152025,-2000200400600,NetPresentValue($),Atk10%,Disbest!,C.ProjectLifeDifferences,Letuscomparealonglife(X)projectandashortlife(Y)project.,NETCASHFLOWS,ProjectXProjectY,ENDOFYEAR,0-$1,000-$1,000,102,000,200,33,3750,X50%$1,5362.54Y100%$8181.82,ProjectLifeDifferences,CalculatethePBP,IRR,NPV10%,andPI10%.Whichprojectispreferred?Why?ProjectIRRNPVPI,?,AnotherWaytoLookatThings,1.Adjustcashflowstoacommonterminalyearifproject“Y”willNOTbereplaced.CompoundProjectY,Year110%for2years.Year0123CF-$1,000$0$0$2,420Results:IRR*=34.26%NPV=$818*LowerIRRfromadjustedcash-flowstream.XisstillBest.,ReplacingProjectswithIdenticalProjects,2.UseReplacementChainApproach(AppendixB)whenproject“Y”willbereplaced.,0123,-$1,000$2,000,-1,000$2,000,-1,000$2,000,-$1,000$1,000$1,000$2,000,Results:IRR=100%NPV*=$2,238.17*HigherNPV,butthesameIRR.YisBest.,CapitalRationing（资本配给）,CapitalRationingoccurswhenaconstraint(orbudgetceiling)isplacedonthetotalsizeofcapitalexpendituresduringaparticularperiod.（对总支出有限制）,Example:JulieMillermustdeterminewhatinvestmentopportunitiestoundertakeforBasketWonders(BW).Sheislimitedtoamaximumexpenditureof$32,500onlyforthiscapitalbudgetingperiod.,AvailableProjectsforBW,ProjectICOIRRNPVPIA$50018%$501.10B5,000256,5002.30C5,000375,5002.10D7,500205,0001.67E12,500265001.04F15,0002821,0002.40G17,500197,5001.43H25,000156,0001.24,ChoosingbyIRRsforBW,ProjectICOIRRNPVPIC$5,00037%$5,5002.10F15,0002821,0002.40E12,500265001.04B5,000256,5002.30ProjectsC,F,