Discounted Cash Flow Techniques for Capital Project Evaluation A discounted cash flow analysis is an important tool in capital budgeting as a means of evaluating proposed projects and comparing the growth potential of cash flows. Relevant incremental cash flows must be considered along with the costs of the investment itself in order to determine if the project is to be accepted or rejected. The considerations for acceptance or rejection of a project or slate of projects are the net present value
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APRIL 2010 ST R I C T L Y P R I VAT E AN D C O N F I DEN T I AL INTRODUCTION TO VALUATION Presented by Tristan Fitzgerald Overview of the session Introduction Discounted cash flow (“DCF”) Trading multiples I N T R O DU C T I O N T O VAL U AT I O N Transaction multiples 1 What does the term “value” mean?1 The Oxford Dictionary definition “the material or monetary worth of a thing; the amount at which it may be estimated in terms of some medium of exchange
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previous class. The next two pages review a few of the various ways to go about it. For a discounted CF approach of valuing Commercial Fixtures Inc.‚ I will use the following template: VALUATION APPROACHES – OVERVIEW/REVIEW 1. Comparable Trades Analysis — Using valuation ratios‚ or “multiples” of comparable firms Use one or more valuation ratios‚ which include (a) Price-Earnings (b) Market-Book (c) Price-CF (d) Price-Revenues (e) Enterprise Value to EBITDA‚ and (f) Other ratios
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single model‚ discounted cash flow (DCF): PV= t=1TCt(1+r)t with PV = present value‚ Ct = forecasted incremental cash flow‚ t = project life‚ and r = the opportunity cash capital. The Gaps Myers argued that the gaps between strategic and financial analysis are caused by: * Finance theory and traditional approaches to strategic planning may be kept apart by differences in language and "culture." Managers worry about projects’ book rates of return or impacts on book earnings per share. They
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318.09 | | B) | $52‚464.79 | | C) | $55‚211.16 | | D) | $58‚811.99 | | E) | $60‚923.52 | Question 5 (2 points) Shelley won a lottery and will receive $1‚000 a year for the next ten years. The value of her winnings today discounted at her discount rate is called which one of the following? Question 5 options: | A) | single amount | | B) | future value | | C) | present value | | D) | simple amount | | E) | compounded value | Question 6 (2 points)
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hasil analisa dari penelitian terdahulu‚ yaitu: Cheng dan Christiawan (2011) dalam penelitiannya menunjukkan bahwa pengungkapan CSR berpengaruh signifikan terhadap abnormal return. Didalam penelitian ini menggunakan 2 variabel control yaitu ROE dan PBV. Hasil penelitian untuk variabel kontrol ROE berpengaruh signifikan terhadap abnormal return‚ sedangkan variabel control PBV tidak berppengaruh signifikan
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Net present value for the market value The actual value of a security‚ as opposed to its market price or book value. The intrinsic value includes other variables such as brand name‚ trademarks‚ and copyrights that are often dificult to calculate and sometimes not accurately reflected in the market price. One way to look at it is that the market capitalization is the price (i.e. what investors are willing to pay for the company) and intrinsic value is the value (i.e. what the company is really worth)
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Mattel Property‚ Plant‚ and Equipment Property‚ plant‚ and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over estimated useful lives of 10 to 40 years for buildings‚ 3 to 10 years for machinery and equipment‚ and 10 to 20 years‚ not to exceed the lease term‚ for leasehold improvements. Tools‚ dies‚ and molds are amortized using the straight-line method over 3 years. Estimated useful lives are periodically reviewed
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policy intended to be operative under real world conditions should consider the firms investment opportunities‚ any preferences that investors have for dividends as opposed to capital gains and vice versa‚ and difference in “cost” between retained earnings and new equity issues. Various firms adopt dividend policies depending on the company’s articles of association and the prevailing economic situation. Some make high pay out‚ while others make low pay out and yet others pay stock dividends (bonus
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1. EXECUTIVE SUMMARY Stock Pick: Michael Kors (MK) is a global luxury lifestyle brand of consumer products‚ which range from American luxury sportswear to accessories‚ footwear and apparel. The company operates in three business segments – retail‚ wholesale and licensing. MK is traded on the New York Stock Exchange. Although MK was established 30 years ago as a luxury brand‚ its initial public offering was only on December 2011. (MK Annual Report 2013) 2. KEY HIGHLIGHTS Rapid Revenue Growth:
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