statements and taxes, conduct a basic lease analysis from the perspective of the lessee, discuss the factors that create value in lease transactions, explain in general terms how businesses are valued, and conduct a business valuation using discounted cash flow and market multiple approaches. Introduction This chapter covers two unrelated topics: lease financing and business valuation. Leasing is a substitute for debt financing and hence expands the range of financing alternatives available to
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GUIDE ON VALUATION OF TECHNOLOGY Guide on Valuation of Technology TABLE OF CONTENTS 1.0 INTRODUCTION 1.1 1.2 1.3 1.4 DEFINITION OF TECHNOLOGY ROLE OF TECHNOLOGY OPEN INNOVATION STRATEGIC ALLIANCES 3 3 3 3 4 2.0 VALUATION OF TECHNOLOGY 5 3.0 VALUATION METHODS 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 TWENTY-FIVE PERCENT (25%) RULE INCOME TECHNIQUE MARKET APPROACH COST METHOD RELIEF FROM ROYALTY TECHNOLOGY FACTOR APPROACH CAPITALIZATION APPROACH REAL OPTIONS METHOD 5 6 6 7 7
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Options, and Other Capital Budgeting Topics ------------------------------------------------- ANSWERS TO END-OF-CHAPTER QUESTIONS 20-1 a. Real options occur when managers can influence the size and risk of a project’s cash flows by taking different actions during the project’s life. They are referred to as real options because they deal with real as opposed to financial assets. They are also called managerial options because they give opportunities to managers to respond
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CHAPTER 9 RISK ANALYSIS, REAL OPTIONS, AND CAPITAL BUDGETING Answers to Concept Questions 1. Forecasting risk is the risk that a poor decision is made because of errors in projected cash flows. The danger is greatest with a new product because the cash flows are probably harder to predict. 2. With a sensitivity analysis, one variable is examined over a broad range of values. With a scenario analysis, all variables are examined for a limited range of values. 3. It is true that if average
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FIN 3716 Midterm Exam Click Link Below To Buy: http://hwaid.com/shop/fin-3716-midterm-exam/ Q 1 : Activities of a firm which require the spending of cash Q 2 : The sources and uses of cash over a stated period of time are reflected on the 3: Common-size income statement is an accounting statement that expresses all of a firm's expenses as a percentage of 4: Standardizes items on the income statement and balance sheet relative to their values as of a common point in time
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Review of Gator’s Discounted Cash Flow Analysis As companies venture into cash flow testing in the financial company auditing, many of the strategies in the company credit refinement is stated in relatively simple terms. The sensitivity to the company cash flow calls to the experts views on the company performance, the assets and the key problems faced in the financial report (Bauer, 122). The cash flow analysis calls for investigation and within Gator’s discounted cash flow analysis, there
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trouble where it would be wise to preserve cash. Both S&P and Value Line anticipated modest growth for American Greetings in the coming years. Analysis We conducted an analysis for 2012 through 2015 to determine the value of the company. Our analysis began with calculating the operating cash flows (OCF = operating income * (1 – 0.4) - ∆NWC): Operating Cash Flow (millions) 2011 118 2012 83 2013 86 2014 88 2015 91 Operating Cash Flow (millions) 2011 118 2012 83 2013
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CFA Level I June 2010 - Mock Exam Questions 1. Which of the following least likely violates Standard VII (B): Reference to CFA Institute, the CFA Designation and the CFA Program? A. Joe Smith, C.F.A. B. Joe Smith, CFA C. Joe Smith, Chartered Financial Analyst Answer: C According to Standard VII (B), an analyst must not exaggerate the meaning or implications of membership of CFA Institute, holding the CFA designation, or candidacy in the CFA Program. A member cannot use a bold or larger font
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implemented. Expenditures for a large project often in these phases. The final step in the process will be the follow-up stage. Results are monitored and tell the actual outcomes. Sunk cost and Opportunity Cost Doing the time of estimating the relevant cash
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Advanced Fuels Corporations Financial Analysis and Forecasting Wai Wai Yung Wing Man Tsoi Introduction: Advanced Fuels Corporation (AFC) was founded five years ago by Dr. Zachary Aplin. In the fourth year of research he and his two –member staff made a major break-through that can convert grain waste products into ethanol which can mix with gasoline to produce a better burning automobile fuel. Producing ethanol from waste products would lower its cost dramatically so the market potential
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