present value and capital budgeting(公司理财 罗斯 第七版).ppt

_present_value_and_capital_budgeting(公司理财_罗斯_第七版)PresentValue::AReal-:—’:wewantincrementalafter-—“depreciation”.(Ifournewproductcausesexistingcustomerstodemandlessofcurrentproducts,weneedtorecognizethat.)Synergy6EstimatingCashFlowsCashFlowsfromOperationsRecallthat:OperatingCashFlow=EBIT–Taxes+CapitalSpendingDon’etsalvagevalue(aftertax,ofcourse).,it’senoughtoassumethatthefirm’slevelofdebt(henceinterestexpense):AnExampleCostsoftestmarketing(alreadyspent):$250,000. Currentmarketvalueofproposedfactorysite(whichweown):$150,000. Costofbowlingballmachine:$100,000(ordingtoACRS5-yearlife). workingcapital:$10,000. Production(inunits)byyearduring5-yearlifeofthemachine:5,000,8,000,12,000,10,000,6,000. Priceduringfirstyearis$20;priceincreases2%peryearthereafter. Productioncostsduringfirstyearare$10perunitandincrease10%peryearthereafter. Annualinflationrate:5% WorkingCapital:initially$10,panyYear0 Year1 Year2 Year3 Year4Year5Investments:(1) Bowlingballmachine – *(2) Accumulated (3) Adjustedbasisof depreciation(endofyear)(4