公司战略和净现值

ChapterOutline8.1CorporateStrategyandPositiveNPV8.2DecisionTrees8.3SensitivityAnalysis,ScenarioAnalysis,andBreak-EvenAnalysis8.4Options8.5SummaryandConclusionsIntroducenewproductsAppleCorporationandthemouseDevelopcoretechnologyHondaandsmallenginesCreatebarriertoentryQualcomm’spatentsonproprietarytechnologyIntroducevariationsonexistingproductsChrysler’sPTCruiserCreateproductdifferentiationCoca-Cola—it’stherealthingUtilizeorganizationalinnovationMotorolajust-in-timeinventorymanagementExploitanewtechnologyYahoo!’suseofbanneradvertisementsonthewebCorporateStrategyandPositiveNPVCorporateStrategyandtheStockMarketThereshouldbeaconnectionbetweenthestockmarketandcapitalbudgeting.IfthefirminvestsinapositiveNPVprojects,thefirm’sstockpriceshouldgoup.Sometimesthestockmarketprovidesnegativecluesastoanewproject’sNPV.ConsiderAT&T’srepeatedattemptstopenetratethecomputer-manufacturingindustry.8.2DecisionTreesAllowustographicallyrepresentthealternativesavailabletousineachperiodandthelikelyconsequencesofouractions.ExampleofDecisionTreeDonotstudyStudyfinanceOpencirclesrepresentdecisionstobemade.Filledcirclesrepresentreceiptofinformatione.g.atestscoreinthisclass.Thelinesleadingawayfromthecirclesrepresentthealternatives.“C”“A”“B”“F”“D”StewartPharmaceuticalsTheStewartPharmaceuticalsCorporationisconsideringinvestingindevelopingadrugthatcuresthecommoncold.Acorporateplanninggroup,includingrepresentativesfromproduction,marketing,andengineering,hasrecommendedthatthefirmgoaheadwiththetestanddevelopmentphase.Thispreliminaryphasewilllastoneyearandcost$1billion.Furthermore,thegroupbelievesthatthereisa60%chancethattestswillprovesuccessful.Iftheinitialtestsaresuccessful,StewartPharmaceuticalscangoaheadwithfull-scaleproduction.Thisinvestmentphasewillcost$1,600million.Productionwilloccuroverthenext4years.StewartPharmaceuticalsNPVofFull-ScaleProductionfollowingSuccessfulTestNotethattheNPViscalculatedasofdate1,thedateatwhichtheinvestmentof$1,600millionismade.Laterwebringthisnumberbacktodate0.InvestmentYear1Years2-5Revenues$7,000VariableCosts(3,000)FixedCosts(1,800)Depreciation(400)Pretaxprofit$1,800Tax(34%)(612)NetProfit$1,188CashFlow-$1,600$1,588DecisionTreeforStewartPharmaceuticalDonottestTestFailureSuccessDonotinvestInvestInvestThefirmhastwodecisionstomake:Totestornottotest.Toinvestornottoinvest.StewartPharmaceutical:DecisiontoTestLet’smovebacktothefirststage,wherethedecisionboilsdowntothesimplequestion:shouldweinvest?Theexpectedpayoffevaluatedatdate1is:TheNPVevaluatedatdate0is:Soweshouldtest.8.3SensitivityAnalysis,ScenarioAnalysis,andBreak-EvenAnalysisAllowsustolookthebehindtheNPVnumbertoseefirmourestimatesare.Whenworkingwithspreadsheets,trytobuildyourmodelsothatyoucanjustadjustvariablesinonecellandhavetheNPVcalculationskeytothat.SensitivityAnalysisandScenarioAnalysisIntheStewartPharmaceuticalexample,revenueswereprojectedtobe$7,000,000peryear.Iftheyareonly$6,000,000peryear,theNPVfallsto$1,341.64Alsoknownas“whatif”analysis;weexaminehowsensitiveaparticularNPVcalculationistochangesintheunderlyingassumptions.InvestmentYear1Years2-5Revenues$6,000VariableCosts(3,000)FixedCosts(1,800)Depreciation(400)PretaxprofitTax(34%)NetProfitCashFlow-$1,600SensitivityAnalysisWecanseethatNPVisverysensitivetochangesinrevenues.Forexample,a14%dropinrevenueleadstoa61%dropinNPVForevery1%dropinrevenuewecanexpectroughlya4.25%dropinNPVScenarioAnalysisAvariationonsensitivityanalysisisscenarioanalysis.Forexample,thefollowingthreescenarioscouldapplytoStewartPharmaceuticals:Thenextyearseachhaveheavycoldseasons,andsalesexceedexpectations,butlaborcostsskyrocket.Thenextyearsarenormalandsalesmeetexpectations.Thenextyearseachhavelighterthannormalcoldseasons,sosalesfailtomeetexpectations.OtherscenarioscouldapplytoFDAapprovalfortheirdrug.Foreachscenario,calculatetheNPV.Break-EvenAnalysisAnotherwaytoexaminevariabilityinourforecastsisbreak-evenanalysis.IntheStewartPharmaceuticalsexample,wecouldbeconcernedwithbreak-evenrevenue,break-evensalesvolumeorbreak-evenprice.Thebreak-evenIATCFisgivenby:Break-EvenAnalysisWecanstartwiththebreak-evenincrementalafter-taxcashflowandworkbackwardsthroughtheincomestatementtobackoutbreak-evenrevenue:InvestmentcalculationCashFlowRevenuesVariableCostsFixedCostsDepreciationPretaxprofitTax(34%)NetProfitCashFlow$504.75InvestmentcalculationCashFlowRevenuesVariableCostsFixedCostsDepreciationPretaxprofitTax(34%)NetProfit=504-depreciation$104.75CashFlow$504.75InvestmentcalculationCashFlowRevenuesVariableCostsFixedCostsDepreciationPretaxprofit=104.75÷(1-.34)$158.72Tax(34%)NetProfit=504-depreciation$104.75CashFlow$504.75InvestmentcalculationCashFlowRevenues=158.72+VC+FC+D$5,358.72VariableCosts(3,000)FixedCosts(1,800)Depreciation(400)Pretaxprofit=104.75÷(1-.34)$158.72Tax(34%)NetProfit=504-depreciation$104.75CashFlow$504.75Break-EvenAnalysisNowthatwehavebreak-evenrevenueas$5,358.72millionwecancalculatebreak-evenpriceandsalesvolume.Iftheoriginalplanwastogeneraterevenuesof$7,000millionbysellingthecoldcureat$10perdoseandselling700milliondosesperyear,wecanreachbreak-evenrevenuewithasalesvolumeofonly:Wecanreachbreak-evenrevenuewithapriceofonly:8.4OptionsOneofthefundamentalinsightsofmodernfinancetheoryisthatoptionshavevalue.Thephrase““Weareoutofoptions”issurelyasignoftrouble.OptionsBecausecorporationsmakedecisionsinadynamicenvironment,theyhaveoptionsthatshouldbeconsideredinprojectvaluation.TheOptiontoExpandHasvalueifdemandturnsouttobehigherthanexpected.TheOptiontoAbandonHasvalueifdemandturnsouttobelowerthanexpected.TheOptiontoDelayHasvalueiftheunderlyingvariablesarechangingwithafavorabletrend.TheOptiontoDelay:ExampleConsidertheaboveproject,whichcanbeundertakeninanyofthenext4years.Thediscountrateis10percent.Thepresentvalueofthebenefitsatthetimetheprojectislaunchedremainconstantat$25,000,butsincecostsaredecliningtheNPVatthetimeoflaunchsteadilyrises.Thebesttimetolaunchtheprojectisinyear2——thisscheduleyieldsthehighestNPVwhenjudgedtoday.DiscountedCashFlowsandOptionsWecancalculatethemarketvalueofaprojectasthesumoftheNPVoftheprojectwithoutoptionsandthevalueofthemanagerialoptionsimplicitintheproject.Agoodexamplewouldbecomparingthedesirabilityofaspecializedmachineversusamoreversatilemachine.Iftheybothcostaboutthesameandlastthesameamountoftimethemoreversatilemachineismorevaluablebecauseitcomeswithoptions.TheOptiontoAbandon:ExampleSupposethatwearedrillinganoilwell.Thedrillingrigcosts$300todayandinoneyearthewelliseitherasuccessorafailure.Theoutcomesareequallylikely.Thediscountrateis10%.ThePVofthesuccessfulpayoffattimeoneis$575.ThePVoftheunsuccessfulpayoffattimeoneis$0.TheOptiontoAbandon:ExampleTraditionalNPVanalysiswouldindicaterejectionoftheproject.TheOptiontoAbandon:ExampleThefirmhastwodecisionstomake:drillornot,abandonorstay.DonotdrillDrillFailureSuccess:PV=$500Selltherig;salvagevalue=$250Sitonrig;stareatemptyhole:PV=$0.TraditionalNPVanalysisoverlookstheoptiontoabandon.TheOptiontoAbandon:ExampleWhenweincludethevalueoftheoptiontoabandon,thedrillingprojectshouldproceed:ValuationoftheOptiontoAbandonRecallthatwecancalculatethemarketvalueofaprojectasthesumoftheNPVoftheprojectwithoutoptionsandthevalueofthemanagerialoptionsimplicitintheproject.8.5SummaryandConclusionsThischapterdiscussesanumberofpracticalapplicationsofcapitalbudgeting.Weaskaboutthesourcesofpositivenetpresentvalueandexplainwhatmanagerscandotocreatepositivenetpresentvalue.Sensitivityanalysisgivesmanagersabetterfeelforaproject’srisks.Scenarioanalysisconsidersthejointmovementofseveraldifferentfactorstogivearichersenseofaproject’srisk.Break-evenanalysis,calculatedonanetpresentvaluebasis,givesmanagersminimumtargets.Thehiddenoptionsincapitalbudgeting,suchastheoptiontoexpand,theoptiontoabandon,andtimingoptionswerediscussed.9、静夜四四无邻，，荒居旧旧业贫。。。1月-231月-23Friday,January6,202310、雨中黄叶树树，灯下白头头人。。13:37:2313:37:2313:371/6/20231:37:23PM11、以以我我独独沈沈久久，，愧愧君君相相见见频频。。。。1月月-2313:37:2313:37Jan-2306-Jan-2312、故人人江海海别，，几度度隔山山川。。。13:37:2313:37:2313:37Friday,January6,202313、乍见翻翻疑梦，，相悲各各问年。。。1月-231月-2313:37:2313:37:23January6,202314、他乡生白发发，旧国见青青山。。06一月20231:37:23下午13:37:231月-2315、比不了了得就不不比，得得不到的的就不要要。。。。一月231:37下午午1月-2313:37January6,202316、行动动出成成果，，工作作出财财富。。。2023/1/613:37:2413:37:2406January202317、做前，能能够环视四四周；做时时，你只能能或者最好好沿着以脚脚为起点的的射线向前前。。1:37:24下下午1:37下下午13:37:241月-239、没有失失败，只只有暂时时停止成成功！。。1月-231月-23Friday,January6,202310、很多事情努努力了未必有有结果，但是是不努力却什什么改变也没没有。。13:37:2413:37:2413:371/6/20231:37:24PM11、成功就是是日复一日日那一点点点小小努力力的积累。。。1月-2313:37:2413:37Jan-2306-Jan-2312、世间成事事，不求其其绝对圆满满，留一份份不足，可可得无限完完美。。13:37:2413:37:2413:37Friday,January6,202313、不知香积寺寺，数里入云云峰。。1月-231月-2313:37:2413:37:24January6,202314、意志坚强的的人能把世界界放在手中像像泥块一样任任意揉捏。06一月20231:37:24下午13:37:241月-2315、楚塞三三湘接，，荆门九九派通。。。。一月231:37下午午1月-2313:37January6,202316、少少年年十十五五二二十十时时，，步步行行夺夺得得胡胡马马骑骑。。。。2023/1/613:37: