Zusammenfassung der Ressource
NPV and other Investment Criteria
- Capital Budgeting
Anmerkungen:
- Analysis of any potential addition of fixed assets, long term, high cost
- Steps
- Estimating Cash Flows
- Estimating risk of CFs and determining appropriate cost of capital
- Evaluate projects and accept or reject
- Criteria
- Time Value of Money?
- Risk Adjust?
- Creates Value?
- Valuation Criteria
- Net present Value
Anmerkungen:
- Difference in investments market value and cost. If NPV for future cash flows within a certain time span is positive, investment is viable
- Discounted Cash Flow Valuation
Anmerkungen:
- Cash flow after discounting. Find the Present value of future cash flows
- Payback Period
Anmerkungen:
- Number of years req. to recover costs. Accept if it is within a pre-set limit
- Strenghts
- Weaknesses
- Discounted Payback Period
- Average Accounting Ratio (profitability Ratio)
- Strenghts
- Weaknesses
- IRR
- Enter text here