immediately after the initial investment at the beginning of period one using the discounted free cash flow method. (End of) Period | 1 | 2 | 3 | 4 | 5 | 6 | Discount Factor at 10% | 0.9091 | 0.8264 | 0.7513 | 0.6830 | 0.6209 | 0.5645 | DCF Valuation | | | | | | | Cash Inflows | 600 | 1,200 | 1,200 | 1,200 | 1,200 | 600 | Cash Outflows | (720) | (720) | (720) | (720) | 0 | 0 | Free Cash Flow | (120) | 480 | 480 | 480 | 1,200 | 600 | DCF Valuation | (109) | 396.69 | 360
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Corporate Evaluation of Philip Morris International Study Programme Master of Business Administration (MBA) Module: Assignment: Course Instructor: Financial Management No 1/1 Authors: Student ID Number: 1st Academic Semester 2013 Place, Date Dortmund, 28th February 2014 Corporate Evaluation of Philip Morris International I Executive Summary The task of this assignment was to evaluate a company (if possible, listed) by two different evaluation methods: DCF method
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capital investment. The NPV is calculated by discounting future cash flows to what their value is today and then using the total amount of discou future cash flows to calculate the net present value of the total investment. The cost of capital is used in NPV analysis because the calculations to determine the net present value are based on the cost The internal rate of return is the rate at which the present value of all future cash flow is equal to the initial investment. In ot The cost of capital
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business valuation question. There are a number of ways to estimate the value of a business. You have probably covered one or more of these ways in a 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
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13/3/2013 Nike, Inc. Cost of Capital 1 Discussion Questions • What is the WACC and why is it important to estimate a firm’s cost of capital? What does it represent? Is the WACC set by investors or by managers? • Do you agree with Joanna Cohen’s WACC calculation? Why or why not? If you do not agree with Cohen’s analysis, calculate your own WACC for Nike and be prepared to justify your assumptions. What mistakes did Joanna Cohen make in her analysis? Which method is best for calculating
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Internal rate of return method. D. Cost of capital as a screening tool. E. Further aspects of the net present value method. 1. Total-cost approach. 2. Incremental-cost approach. 3. Least-cost decisions. F. Uncertain future cash flows. G. Preference rankings. H. Payback period method. I. Simple rate of return method. J. (Appendix 14C) Income taxes in capital budgeting PRESENT VALUE CONCEPTS A dollar today is worth more than a dollar a year from now because
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disadvantages of going public through an IPO. Advantages Increased capital from public offering * Increased liquidity * Public market creates shareholders’ value * Facilitates merger & acquisition – shares can be used instead of cash * Accelerates company’s growth * Increased recognition * Employee stock options are valuable Disadvantages * Costs and time demands – costs associated with reporting could be significant and more time needed for statements preparations
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10/6/2010 1. Timeline of the free cash flows for the 10 years of the project. (all numbers are in millions) |year |0 |1 |2 |3 | |Long Term Debt | 75.079,3 | 63.799,4 | 59.706,0 | 53.165,0 | |Cash and Equivalents | 24.170,3 | 25.204,6
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accumulation of shares by a single investor Sir David Benjamin, Diamond Chemicals, with earning per share dropping in half over a year’s time £60.00 in 1999 to £30.00 in 2000. The declining financial situation along with Merseyside’s outdated process flows and labor intensive operation has triggered Merseyside’s Plant Manager – Lucy Morris to develop and present a capital project plan to senior management which aims at renovating the production line which would result in increased throughputs and energy
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EDLIRA KASEMI 04/07/2013 WEEK 5 ASSIGNMENT Leasing is undertaken primarily for what purposes? A lease is basically an agreement among two parties for the hire of a benefit. The lessor is the lawful proprietor of the asset who rentals out the asset to the lessee. At the conclusion of the lease the benefit is refunded to the lessor. The lessee will wage a lease payment to the lessor in reappearance for the usage of the asset. The accounting action for the
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