第六章 投资决策的其他方法

McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-0Chapter

OutlineWhy

Use

Net

Present

Value?The

Payback

Period

RuleThe

Discounted

Payback

Period

RuleThe

Average

Accounting

ReturnThe

Internal

Rate

of

ReturnProblems

with

the

IRR

ApproachThe

Profitability

IndexThe

Practice

of

Capital

BudgetingSummary

and

ConclusionsMcGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-16.1WhyUseNetPresentValue?Accepting

positiveNPVprojectsbenefitsshareholders.NPVusescash

flowsNPVusesallthecash

flowsof

the

projectNPVdiscounts

the

cash

flowsproperlyMcGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-2TheNetPresentValue

(NPV)RuleNetPresentValue

(NPV)=

TotalPV

of

futureCF’s+InitialInvestmentEstimating

NPV:1.

Estimatefuture

cashflows:

how

much?andwhen?2.Estimatediscountrate3.EstimateinitialcostsMinimumAcceptance

Criteria:Acceptif

NPV

>0RankingCriteria:

ChoosethehighestNPVMcGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-3GoodAttributesof

the

NPV

Rule1.Usescash

flows2.

UsesALLcashflows

of

the

project3.

DiscountsALLcash

flowsproperlyReinvestmentassumption:the

NPV

rule

assumesthatallcashflows

can

be

reinvestedatthediscountrate.McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-46.2ThePaybackPeriod

RuleHowlongdoes

ittake

the

project

t“op“ay

back”itsinitialinvestment?PaybackPeriod

=numberofyearstorecoverinitialcostsMinimumAcceptance

Criteria:setby

managementRankingCriteria:setby

managementMcGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-5ThePaybackPeriod

Rule(continued)Disadvantages:Ignoresthetimevalue

of

moneyIgnorescashflows

afterthepaybackperiodBiased

againstlong-termprojectsRequiresanarbitrary

acceptancecriteriaA

projectacceptedbasedonthepaybackcriteriamaynothaveapositiveNPVAdvantages:EasytounderstandBiased

toward

liquidityMcGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-66.3TheDiscounted

Payback

Period

RuleHowlongdoes

ittake

the

project

t“op“ay

back”itsinitialinvestment

taking

the

timevalueofmoney

into

account?By

thetimeyouhavediscountedthecashflows,youmightaswell

calculatetheNPV.McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-76.4TheAverageAccounting

Return

RuleAnotherattractive

but

fatally

flawed

approach.RankingCriteriaandMinimumAcceptanceCriteriasetbymanagementDisadvantages:Ignoresthetimevalue

of

moneyUsesanarbitrary

benchmarkcutoff

rateBased

onbook

values,

not

cash

flowsandmarketvaluesAdvantages:Theaccounting

information

is

usually

availableEasytocalculateMcGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-86.5TheInternalRate

ofReturn(IRR)

RuleIRR:thediscount

that

setsNPVto

zeroMinimumAcceptance

Criteria:Accept

if

the

IRR

exceeds

the

requiredreturn.RankingCriteria:Select

alternative

withthehighestIRRReinvestmentassumption:Allfuture

cashflows

assumed

reinvestedattheIRR.Disadvantages:Doesnotdistinguishbetweeninvesting

and

borrowing.IRRmaynotexist

orthere

may

be

multiple

IRRProblemswith

mutually

exclusiveinvestmentsAdvantages:Easy

to

understandandcommunicateMcGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-9The

InternalRateof

Return:

Example123Consider

thefollowing

project:$50

$100$1500-$200The

internalrateof

return

for

thisproject

is19.44%McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-10The

NPV

Payoff

Profile

for

This

ExampleIf

wegraphNPV

versus

discount

rate,

we

can

seetheIRR

asthe

x-axis

intercept.IRR

=19.44%McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-116.6Problems

with

theIRR

ApproachMultiple

IRRs.Are

WeBorrowing

orLending?The

Scale

Problem.The

TimingProblem.McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-12Multiple

IRRsThereare

two

IRRsfor

this

project:$200

$8000

1

2-$2003-$800100%

=IRR20%

=IRR1Whichone

shouldwe

use?McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-13The

Scale

ProblemWouldyou

rather

make

100%

or50%onyourinvestments?What

if

the100%

returnis

ona

$1

investment

whilethe

50%returnis

ona

$1,000

investment?McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-14The

TimingProblem123$10,000$1,000$1,0000-$10,000Project

A123$1,000$1,000$12,0000-$10,000Project

BThe

preferred

project

inthiscase

dependson

thediscount

rate,

not

theIRR.McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-15The

TimingProblem10.55%

=

crossover

rate12.94%=IRRB16.04%=IRRAMcGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-16Calculatingthe

Crossover

RateCompute

theIRR

for

either

project“A-B”

or“B-A”

”10.55%=IRRMcGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-17Mutually

Exclusivevs.

Independent

ProjectMutually

ExclusiveProjects:only

ONE

ofseveralpotentialprojects

canbe

chosen,e.g.

acquiringanaccounting

system.RANK

all

alternatives

and

select

thebestone.IndependentProjects:

accepting

or

rejectingoneproject

does

notaffectthe

decision

of

the

otherprojects.Must

exceeda

MINIMUM

acceptance

criteria.McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-186.7TheProfitabilityIndex(PI)RuleMinimum

AcceptanceCriteria:Acceptif

PI>

1Ranking

Criteria:Selectalternativewithhighest

PIDisadvantages:Problems

with

mutually

exclusive

investmentsAdvantages:May

beuseful

whenavailable

investment

funds

are

limitedEasy

to

understandandcommunicateCorrect

decision

when

evaluating

independent

projectsMcGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-196.8The

Practiceof

CapitalBudgetingVariesby

industry:–

Some

firms

use

payback,othersuseaccountingrate

ofreturn.The

most

frequently

usedtechnique

forlargecorporations

isIRR

or

NPV.McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-20Example

of

Investment

RulesCompute

theIRR,

NPV,

PI,

andpayback

period

forthefollowing two

projects.Assume

therequired

returnis10%.Year

ProjectA Project

B0123-$200

-$150$200$50$800$100-$800

$150McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-21Example

of

Investment

RulesProject

A

ProjectBCF0-$200.00-$150.00PV0of

CF1-3$241.92$240.80NPV

=$41.92$90.80IRR

=0%,

100%

36.19%PI

=

1.20961.6053McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-22Example

of

Investment

RulesPayback

Period:Project

AProjectBTime

CF

Cum.CFCFCum.CF-200-200-150-1502000

50 -100800800

100

00123-8000

150150Payback

period

forproject

B

=2years.Payback

period

forproject

A

=1

or3

years?McGraw-Hill/Irwin

Copyright

©

2002

by

The

McGraw-Hill

Companies,

Inc.

All

rights

reserved.6-23RelationshipBetween

NPVand

IRRDiscount

rate NPVfor

ANPV

for

B-10% -87.52234.770%0.00150.0020%59.2647.9240%59.48-8.6060%42