文档介绍：第11章 Investment Decision Rule Learning objectives: -- To show how to use discounted cash flow ,payback period, IRR rule to make investment decisions -- To show how to make investment decisions in mutually exclusive project or in a new project. -- To show how to use the Microsoft Excel to make investment decisions and capital budgeting. 1 Why Present Value? We apply the techniques of Discounted Cash Flow to the analysis of investment decisions by business firms. The process of analyzing the investment decision(or choosing pany ’ s long-term capital investment) is called Capital Budgeting. The process of Capital Budgeting can be broken down into five steps as a project moves from idea to reality: -- Generating ideas for capital budgeting projects. -- Preparing proposals -- Reviewing existing projects and facilities. -- Evaluating proposed projects and creating the capital budget, pany ’ s set of planned capital expenditures. -- Deciding and preparing appropriation requests. where do Investment e From? Classifying Capital Budgeting Projects -- Maintenance projects -- Cost-saving / Revenue-enhancement projects -- Capacity expansion in current businesses -- New products and new businesses -- Projects required by government regulation pany policy Division management ideas ideas ideas R&D ideas Plant management Strategic planning ideas Production management and other employees Mutually Exclusive versus Independent Project Mutually Exclusive Projects: only ONE of several potential projects can be chosen, . acquiring an accounting system. – RANK all alternatives and select the best one. Independent Projects: accepting or rejecting one project does not affect the decision of the other projects. – Must exceed a MINIMUM acceptance criteria. 2 p