8FINA 301 Capital Budgeting Exercises Nicholas Bush Capital Budgeting Exercise 1 You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $1500 initially, and then $400 per year in maintenance costs. Machine B costs $2000 initially, has a life of three years, and requires $300 in annual maintenance costs. Either machine must
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disadvantages each: a. The payback period & the discounted payback period criteria of capital budgeting. The payback period measures the time that it takes to recoup the cost of the investment. If the cash flows are an annuity, then we can simply divide the cost by the annual cash flow to determine the payback period Otherwise, as in the example, we subtract the cash flows from the cost until the remainder is zero The shorter the payback period, the better Generally
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Portland State University School of Business Administration FIN 565: Cases in Corporate Finance Case Descriptions and Suggestions Fall 2010 As you review the case descriptions and read the cases, develop a plan for your analysis. The case report and presentation should include, but not be limited to, the suggested questions I have provided. Do not submit or present the case a simply a numbered series of answers to the questions. The case analysis must be a narrative report that includes
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organization could be in real trouble. What techniques would you recommend for your organization? I think I would use cash because it will allow the business to meet the day to day expenses but it could reduce cash holding costs. Inventory can allow for uninterrupted production and reduce the investment in raw materials. Debtors will attract customers that might impact cash flows and cash conversion cycle will off set by the increase revenue and return on capital. DQ2 What is capital planning?
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to grow at 7% per year for the foreseeable future. What is PTFC’s weighted average cost of capital (WACC)? Question 2: (Capital Budgeting) 4 points Consider Projects A and B, with net cash flows as follows: ---- Net Cash Flows ---- Project A Project B Initial Cost at T-0 (Now) ($30,000) ($50,000) cash inflow at
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money 4. Calculate the expected rate of return. 5. Perform capital budgeting analysis 6. Apply skills and technique in financial decisions. | 9. | Synopsis: This course focuses on the basic business finance theory both quantitative and qualitative with some simple application. Topics addressed in this course will include the mathematics of finance, time value of money, valuation concepts, capital budgeting, working capital management, the financial market, capital market, and the
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The Capital Budgeting Practices of Listed Irish Companies Insights from CFOs on Their Investment Appraisal Techniques George Kester and Geraldine Robbins Pendahuluan Adanya keterbatasan kredit dan sumber pendanaan lainnya yang saat ini tidak menentu dan memberikan tantangan bagi lingkungan ekonomi. Prinsip kehati-hatian dalam mengevaluasi profitabilitas dari investasi modal yang diusulkan dan alokasi kelangkaan modal menjadi jauh lebih penting dari sebelumnya. Survey dilakukan pada bulan November
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documented thus sales are not recognized) can lead to loss of assets and revenues - Incomplete cash collection by waiters lead to loss of assets Accounting Process Management 2 - 6 - - Theft of ingredients or cash by personnel leading to loss of assets - Since sales transactions are relatively simple personnel usually performs more than one duty (servers take orders, serve meals, and collect cash) which gives opportunity to fraud b. What risks are specific for GoodFood? Besides the above mentioned
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Week 1 Assignment CIS331 Kevin Jayne Zishan Umar 07/05/12 The real-world problem that I have is keeping track of my expenses and often falling behind in debt. It is not true that I am a heavy spender, and I make decent income to support myself and my expenses. The problem of not keeping track of my paid bills, due bill, due dates, automatic withdraw payments and my regular expenses have gotten me so frustrated that I gave up looking over my account and therefore, there is no savings. I don’t
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A budget can be defined as a formulised statement of the goals and the objectives of an organization in financial terms. It states the future projection of sales, revenues and profits that give managers a clear vision of targets to achieve in a year. (Montana and Charnov, 2000) Today Budgets are used by almost all companies as its use allows the managers to establish the objectives of the business in quantitative terms which is usually for a year. Budgetary control is a system of management control
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