财务管理(英文第十三版)12.pptx

财务管理(英文第十三版)12.pptx

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Chapter12,CapitalBudgetingandEstimatingCashFlows,CapitalBudgetingandEstimatingCashFlows,TheCapitalBudgetingProcessGeneratingInvestmentProjectProposalsEstimatingProject“After-TaxIncrementalOperatingCashFlows”,WhatisCapitalBudgeting?

Theprocessofidentifying,analyzing,andselectinginvestmentprojectswhosereturns（cashflows）areexpectedtoextendbeyondoneyear.,TheCapitalBudgetingProcess,Generateinvestmentproposalsconsistentwiththefirmsstrategicobjectives.Estimateafter-taxincrementaloperatingcashflowsfortheinvestmentprojects.Evaluateprojectincrementalcashflows.,TheCapitalBudgetingProcess,Selectprojectsbasedonavalue-maximizingacceptancecriterion.Reevaluateimplementedinvestmentprojectscontinuallyandperformpostauditsforcompletedprojects.,ClassificationofInvestmentProjectProposals,1.Newproductsorexpansionofexistingproducts2.Replacementofexistingequipmentorbuildings3.Researchanddevelopment4.Exploration5.Other（e.g.,safetyorpollutionrelated）,ScreeningProposalsandDecisionMaking,1.SectionChiefs2.PlantManagers3.VPforOperations4.CapitalExpendituresCommittee5.President6.BoardofDirectors,Advancementtothenextleveldependsoncostandstrategicimportance.,EstimatingAfter-TaxIncrementalCashFlows,Cash（notaccountingincome）flowsOperating（notfinancing）flowsAfter-taxflowsIncrementalflows,Basiccharacteristicsofrelevantprojectflows,EstimatingAfter-TaxIncrementalCashFlows,IgnoresunkcostsIncludeopportunitycostsIncludeproject-drivenchangesinworkingcapitalnetofspontaneouschangesincurrentliabilitiesIncludeeffectsofinflation,Principlesthatmustbeadheredtointheestimation,TaxConsiderationsandDepreciation,Generally,profitablefirmsprefertouseanacceleratedmethodfortaxreportingpurposes（MACRS）.,Depreciationrepresentsthesystematicallocationofthecostofacapitalassetoveraperiodoftimeforfinancialreportingpurposes,taxpurposes,orboth.,DepreciationandtheMACRSMethod,Everythingelseequal,thegreaterthedepreciationcharges,thelowerthetaxespaidbythefirm.Depreciationisanoncashexpense.Assetsaredepreciated（MACRS）ononeofeightdifferentpropertyclasses.Generally,thehalf-yearconventionisusedforMACRS.,MACRSSampleSchedule,DepreciableBasis,Intaxaccounting,thefullyinstalledcostofanasset.Thisistheamountthat,bylaw,maybewrittenoffovertimefortaxpurposes.DepreciableBasis=CostofAsset+CapitalizedExpenditures,CapitalizedExpenditures,CapitalizedExpendituresareexpendituresthatmayprovidebenefitsintothefutureandthereforearetreatedascapitaloutlaysandnotasexpensesoftheperiodinwhichtheywereincurred.Examples:

Shippingandinstallation,SaleorDisposalofaDepreciableAsset,Oftenhistorically,capitalgainsincomehasreceivedmorefavorableU.S.taxtreatmentthanoperatingincome.,Generally,thesaleofa“capitalasset”（asdefinedbytheIRS）generatesacapitalgain（assetsellsformorethanbookvalue）orcapitalloss（assetsellsforlessthanbookvalue）.,CorporateCapitalGains/Losses,Capitallossesaredeductibleonlyagainstcapitalgains.,Currently,capitalgainsaretaxedatordinaryincometaxratesforcorporations,oramaximum35%.,CalculatingtheIncrementalCashFlows,Initialcashoutflow-theinitialnetcashinvestment.Interimincrementalnetcashflows-thosenetcashflowsoccurringaftertheinitialcashinvestmentbutnotincludingthefinalperiodscashflow.Terminal-yearincrementalnetcashflows-thefinalperiodsnetcashflow.,InitialCashOutflow,a）Costof“new”assetsb）+Capitalizedexpendituresc）+（-）Increased（decreased）NWCd）-Netproceedsfromsaleof“old”asset（s）ifreplacemente）+（-）Taxes（savings）duetothesaleof“old”asset（s）ifreplacementf）=Initialcashoutflow,IncrementalCashFlows,a）Netincr.（decr.）inoperatingrevenueless（plus）anynetincr.（decr.）inoperatingexpenses,excludingdepr.b）-（+）Netincr.（decr.）intaxdepreciationc）=Netchangeinincomebeforetaxesd）-（+）Netincr.（decr.）intaxese）=Netchangeinincomeaftertaxesf）+（-）Netincr.（decr.）intaxdepr.chargesg）=Incrementalnetcashflowforperiod,Terminal-YearIncrementalCashFlows,a）Calculatetheincrementalnetcashflowfortheterminalperiodb）+（-）Salvagevalue（disposal/reclamationcosts）ofanysoldordisposedassetsc）-（+）Taxes（taxsavings）duetoassetsaleordisposalof“new”assetsd）+（-）Decreased（increased）levelof“net”workingcapitale）=Terminalyearincrementalnetcashflow,ExampleofanAssetExpansionProject,BasketWonders（BW）isconsideringthepurchaseofanewbasketweavingmachine.Themachinewillcost$50,000plus$20,000forshippingandinstallationandfallsunderthe3-yearMACRSclass.NWCwillriseby$5,000.LisaMillerforecaststhatrevenueswillincreaseby$110,000foreachofthenext4yearsandwillthenbesold（scrapped）for$10,000attheendofthefourthyear,whentheprojectends.Operatingcostswillriseby$70,000foreachofthenextfouryears.BWisinthe40%taxbracket.,InitialCashOutflow,a）$50,000b）+20,000c）+5,000d）-0（notareplacement）e）+（-）0（notareplacement）f）=$75,000*,*Notethatwehavecalculatedthisvalueasa“positive”becauseitisacashOUTFLOW（negative）.,IncrementalCashFlows,Year1Year2Year3Year4a）$40,000$40,000$40,000$40,000b）-23,33131,11510,3675,187c）=$16,669$8,885$29,633$34,813d）-6,6683,55411,85313,925e）=$10,001$5,331$17,780$20,888f）+23,33131,11510,3675,187g）=$33,332$36,446$28,147$26,075,Terminal-YearIncrementalCashFlows,a）$26,075TheincrementalcashflowfromthepreviousslideinYear4.b）+10,000SalvageValue.c）-4,000.40*（$10,000-0）Note,theassetisfullydepreciatedattheendofYear4.d）+5,000NWC-Projectends.e）=$37,075Terminal-yearincrementalcashflow.,SummaryofProjectNetCashFlows,AssetExpansionYear0Year1Year2Year3Year4-$75,000*$33,332$36,446$28,147$37,075*NoticeagainthatthisvalueisanegativecashflowaswecalculateditastheinitialcashOUTFLOWinslide12-18.,ExampleofanAssetReplacementProject,Letusassumethatpreviousassetexpansionprojectisactuallyanassetreplacementproject.Theoriginalbasisofthemachinewas$30,000anddepreciatedusingstraight-lineoverfiveyears（$6,000peryear）.Themachinehastwoyearsofdepreciationandfouryearsofusefulliferemain-ing.BWcansellthecurrentmachinefor$6,000.Thenewmachinewillnotincreaserevenues（remainat$110,000）butitdecreasesoperatingexpensesby$10,000peryear（old=$80,000）.NWCwillriseto$10,000from$5,000（old）.,InitialCashOutflow,a）$50,000b）+20,000c）+5,000d）-6,000（saleof“old”asset）e）-2,400-f）=$66,600,（taxsavingsfromlossonsaleof“old”asset）,CalculationoftheChangeinDepreciation,Year1Year2Year3Year4a）$23,331$31,115$10,367$5,187b）-6,0006,00000c）=$17,331$25,115$10,367$5,187a）Representthedepreciationonthe“new”project.b）Representtheremainingdepreciationonthe“old”project.c）Netchangeintaxdepreciationcharges.,IncrementalCashFlows,Year1Year2Year3Year4a）$10,000$10,000$10,000$10,000b）-17,33125,11510,3675,187c）=$-7,331-$15,115$-367$4,813d）-2,932-6,046-1471,925e）=$-4,399$-9,069$-220$2,888f）+17,33125,11510,3675,187g）=$12,932$16,046$10,147$8,075,Terminal-YearIncrementalCashFlows,a）$8,075TheincrementalcashflowfromthepreviousslideinYear4.b）+10,000SalvageValue.c）-4,000（.40）*（$10,000-0）.Note,theassetisfullydepreciatedattheendofYear4.d）+5,000Returnof“added”NWC.e）=$19,075Terminal-yearincrementalcashflow.,SummaryofProjectNetCashFlows,AssetExpansionYear0Year1Year2Year3Year4-$75,000$33,332$36,446$28,147$37,075AssetReplacementYear0Year1Year2Year3Year4-$66,600$12,933$16,046$10,147$19,075,