《成本与管理会计（英文）》课件-Chapter 11

CostandManagement

AccountingPart1:FundamentalsofCapitalExpenditureDecisionsTerminology:EnglishChineseCapital

expenditure资本支出Cash

inflow现金流入Cash

outflow现金流出Long

term长期Short

term短期Cost

savings成本节约Initial

cost初始成本Discount贴现CostandManagementAccountingCapitalexpenditure

decisionCapitalexpendituredecisionisalongtermdecisionthatrequirestheevaluationofcashinflowsandoutflowsoverseveralyearstodeterminetheacceptabilityofthe

project.CostandManagementAccountingCapitalexpenditure

decisionFocusonspecificprojectsand

programsSignificantimpacton

thecompetitivenessofthe

businessCostinflowsneedtoexceed

costoutflowstojustifythe

projectQualitativeandstrategic

issuesCostandManagementAccountingCash

flowCashinflowsincludecostsavingsandadditionalincomeandproceeds

fromthesaleofassetsgeneratedbythe

project.Cashoutflowsincludetheinitialcostoftheproject

aswellasanycostincreasestheprojectwillincuroveritslife

cycle.CostandManagementAccountingCash

flowNon-DiscountedCash

FlowMethodsPaybackperiod

methodAccountingrateofreturn

methodCostandManagementAccountingDiscountedCashFlowMethodsNetpresentvalue

methodInternalrateofreturn

methodQuick

CheckCapitalexpenditureisatoolrequired

for:long-term

decisions.highersalesandgreaterprofits.adequatelyfinancingvariousshort-andlong-termaspectsofan

organisation.adequatecapitalinvestmentinareaswhereitisleastneeded.CostandManagementAccountingQuick

CheckCapitalbudgetingdecisionsinvolvedecisions

about:emergency

situations.futurecashinflowsandcash

outflows.short-runplanning

situations.cashinflowsandoutflowsincurrent

years.CostandManagementAccountingSummaryFundamentalsofCapitalexpendituredecisionsCapitalexpendituredecisionisalongtermdecisionthatrequirestheevaluationofcashinflowsandoutflowsoverseveralyearstodeterminetheacceptabilityofthe

project.Non-DiscountedCashFlow

MethodsCashflowDiscountedCashFlow

MethodsCostandManagementAccountingCostandManagement

AccountingPart2:TimeValueof

MoneyTerminology:EnglishChineseTimevalueof

money货币的时间价值Simple

interest单利Compound

interest复利Nominal

rate名义利率Effective

rate实际利率Present

value现值Future

value终值Annuity年金CostandManagementAccountingTimevalueof

moneyTimevalueofmoneymeansthatagivensumofmoneyshouldbevalueddifferently,dependingonwhenthecashflowisto

occur.Thetimevalueofmoneydependsonseveralkey

factors:Theprincipalamount

(P)Theinterestrate

(i)Thenumberofperiods

(n)TimelineCostandManagementAccountingPrincipal01234i=?nInterestInterestisthefeefortheuseofcurrencyforacertainperiodoftime,

whichreferstotheremunerationthattheholderofthecurrency(creditor)receivesfromtheborrower(debtor)forlendingcurrencyorcurrency

capital.CostandManagementAccountingSimple

interestCompound

interestS=P(1+in)S=�(1+

�)�S=futuresumafternperiodsP=principal(orpriceorpresentvalue)i=interestrateper

periodn=numberofperiodsInterestInmostloans,thegiveninterestrateiscalledanominalrate.Iftheinterestiscompoundedinperiodlessthanoneyear,theannualpercentagerateofactualinterestiscalledaneffective

rate.wheninterestiscompoundedoncea

yearNominalrate=Effective

ratewheninterestiscompoundedinperiodlessthanoneyear(daily,weekly,monthly,quarterlyor

6-monthly）퐦CostandManagementAccountingEffective

rate=(�

+

퐍퐨퐦�nal

퐫ate

)�-1Futurevalueand

compoundingFuturevalue(FV)referstotheamountofmoneytowhichaninvestmentwouldgrowoversomelengthoftimeatsomegiveninterest

rate.Thefuturevalue

equation:Futurevalue

factorFVn=futurevalueofinvestmentattheendofperiodnPV=originalprincipal(P0);calledthepresent

valuei=therateofinterestper

periodn=thenumberof

periods;CostandManagementAccountingPresentvalueand

discountingDiscountingisconversionofdatafromfuturetopresentandto

determinepresentvaluefromaknownfuturevalue.Thepresentvalueequation:Discount

factorPV=thevaluetoday(t=0)ofacashflowFVn=thefuturevalueattheendofperiod

ni=thediscountrate,whichistheinterestrateper

periodn=thenumberof

periodsCostandManagementAccountingAnnuitiesAnannuityisaseriesofcashflows,usuallyofequalamount,equallyspacedintime.Fourtypesof

annuity:Ordinary

annuityAnnuity

dueCostandManagementAccountingAnnuitiesAnannuityisaseriesofcashflows,usuallyofequalamount,equallyspacedintime.Fourtypesof

annuity:DeferredannuityOrdinary

perpetuityCostandManagementAccountingQuick

Check1.Themainconceptoftimevalueofmoney

is:thatcashflowsreceivedinthedistantfuturearenot

asvaluableascashflowsreceivedinthenear

future.therecognitionofallrelevantcostsinabsolute

dollars.thatcashflowsreceivedindifferentyearsshould

betreatedasequal.thatcashpaymentsmadeinthefuturehavethe

samevalue

today.CostandManagementAccountingQuick

Check2.Theuseoffuturevaluetocalculatethepresentvalueiscalled:compounding.theannuity

method.discounting.presentvalue

approach.CostandManagementAccountingSummaryTimeValueof

MoneyFuturevalueandcompoundingPresentvalueand

discountingOrdinary

annuityAnnuitydueDeferredannuityOrdinary

perpetuitySimpleinterestandCompound

interestInterestNominalandEffectiveinterestratesCostandManagementAccountingAnnuitiesCostandManagement

AccountingPart3:Non-DiscountedCashFlow

MethodsTerminology:EnglishChinesePaybackperiod

method投资回收期法Unequal不相等的Constant连续不变的Accumulate积累Accountingrateofreturn

method会计收益率法Initial

investment期初投资Net

income净收益Book

value账面价值CostandManagementAccountingPaybackperiod

methodThepaybackperiodofacapitalinvestmentproposalistheamountoftimeitwilltakeforthecashinflowsfromtheprojecttoaccumulatetoan

amountthatcoverstheoriginal

investment.1.PaybackPeriodwithUnequalAnnualNetCash

InflowsPayback

period=Yearstorecovercost+퐫퐞퐦퐚�n�nH퐜퐨stt퐨퐫퐞퐜퐨v퐞퐫퐜퐚sh퐟퐥퐨w퐝퐮퐫�nHth퐞

퐲퐞퐚퐫2.PaybackPeriodwithConstantAnnualNetCash

InflowsPayback

period=�n�t�퐚퐥

�nv퐞st퐦퐞nt퐚nn퐮퐚퐥퐜퐚sh

퐟퐥퐨wCostandManagementAccountingPaybackperiod

methodBasedonthepaybackrule,aninvestmentisacceptableifitscalculatedpaybackislessthansomepre-specifiednumberof

years.AdvantagesCostandManagementAccountingDisadvantagesItiseasytocalculateandunderstand.Itprovidesatoolforroughlyscreeninginvestment

proposals.Itprovidessomeinsightintotherisksofa

project.Itignoresthetimevalueof

money.Itignorescashflowsbeyondthepaybackperiod.Accountingrateofreturn

methodTheaccountingrateofreturnmethodfocusesontheincrementalaccountingprofitthatresultsfroma

project.1.FormulaisusedtocalculatetheaccountingrateofreturnonaninvestmentprojectCostandManagementAccountingAccountingrateof

return=퐚v퐞퐫퐚H퐞퐚nn퐮퐚퐥퐩퐫퐨퐟�t퐟퐫퐨퐦th퐞

퐩퐫퐨�퐞퐜t�n�t�퐚퐥

�nv퐞st퐦퐞nt2.Formulaisusedtocalculatetheaccountingrateofreturnusingaverageamountinvestedina

projectAccountingrateof

return=퐚v퐞퐫퐚H퐞퐚nn퐮퐚퐥퐩퐫퐨퐟�t퐟퐫퐨퐦th퐞

퐩퐫퐨�퐞퐜t퐚v퐞퐫퐚H퐞

�nv퐞st퐦퐞ntAccountingrateofreturn

methodBasedontheaverageaccountingreturnrule,aprojectisacceptableifitsaverageaccountingreturnexceedsa

targetaverageaccounting

return.Advantages DisadvantagesCostandManagementAccountingItscreeninginvestment

projects.Itisconsistencywithfinancialaccountingmethods.Itconsistencywithprofit-basedperformanceevaluation

systems.Itconsiderstheentirelifeofthe

project.Itignoresthetimevalueof

money.Itusesanarbitrarybenchmarkcutoffrate.Itbasedonnetincomeandbookvalues,notcashflowsandmarketvalues.Quick

Check1.Whichofthefollowingreasonswouldexplain

thepopularityofthepayback

technique?Itissimpleto

calculate.Itsresultsareeasytointerpretand

understand.Itprovidesashort-termfiltertoeliminatesome

projects.Allofthegiven

answersCostandManagementAccountingQuick

Check2.Theaccountingrateofreturnmethodfocuses

on:totalaccountingprofit,whichisbasedon

accrualaccounting

procedures.theincrementalaccountingprofitthatresultsfrom

aproject.cashinflowsfromthe

project.taxsavingsfroma

project.CostandManagementAccountingSummaryNon-Discounted

CashFlow

MethodsAdvantagesAccountingrateofreturn

methodDisadvantagesAdvantagesPaybackperiodmethodDisadvantagesCostandManagementAccountingCostandManagement

AccountingPart4:DiscountedCashFlowMethodsTerminology:EnglishChineseNetpresentvalue

method净现值法Positive大于零的Negative小于零的Timeline时间轴Netcash

flow净现金流Internalrateofreturn

method内含报酬率法Reject否决Accept同意CostandManagementAccountingNetpresentvalue

methodThenetpresentvaluemethodcalculatesthepresentvalueofthefuturecashflowsofa

project.Thenetpresentvalue(NPV)onaprojectiscalculatedby

：NPV=PVofcashinflow-PVofcash

outflowAninvestmentshouldbeacceptedifthenetpresentvalueispositiveandrejectedifitisnegative.CostandManagementAccountingNetpresentvalue

methodStep1:Prepareatableshowingthecashflowsduringeachyearoftheproposed

investment.Step2:Calculatethepresentvalueofeachcashflow,usingtherequiredrateofreturn(i).Step3:CalculatetheNPV,whichisthesumofthepresentvaluesofthecashflowsineachperiod.Step4:IftheNPVispositive,thismeanstheprojectisacceptableonfinancialgrounds.CostandManagementAccountingInternalrateofreturn

methodAproject’sinternalrateofreturnistheactualeconomicreturnearnedbytheprojectoveritslife.TheIRRisthediscountratethatmakestheNPVofthecashflowsequalto

zero.Thenetpresentvalue(NPV)onaprojectiscalculatedby

：NPV=PVofcashinflow-PVofcash

outflowIf NPV=0,

thenPVofcashinflow=PVofcash

outflowCostandManagementAccountingInternalrateofreturn

methodBasedontheIRRrule,aninvestmentisacceptableiftheIRRexceedstherequiredreturn.Itshouldberejected

otherwise.Theinternalrateofreturncanbecalculatedbysolvingforiinthefollowingformula:CostandManagementAccountingComparingtheNPVandIRR

methodNetpresentvalue

methodFirst,iftheinvestmentanalysisiscalculatedmanually,itiseasiertocalculatea