文档介绍：By Dr. Xueping Wu City University of Hong Kong April 2012 /~efxpwu/ Corporate Financial Management -- Capital Budgeting, Cost of Capital & Firm Valuation --Managing Capital for Investment, Financing and Operation 1. Capital Budgeting ? A firm has existing and future projects ? Good managers maintain and launch good projects ? What are good projects? ? A project provides a stream of future cash flows ? We need the knowledge of finance to shift cash flows across time ? Discounted cash flows=Present value for today ’ s decision making ?“ Good ” projects = high present values Project Selection Rules ? Net Present Value (净现值) ? Payback Period ? Discounted Payback Period (折现回收期) ? The Internal Rate of Return (内部报酬率,内部收益率) ? The Profitability Index (利润指数,获利指标,盈利性指数) 指将一个投资项目的未来收益折算为现值,使其等于期初投资,所计算出来的回收期(payback period) Present Value (NPV) Rule ? Net Present Value (NPV) =Total PV of future cash flows - Initial Investment ? Estimating NPV (估计现金值) ( ponents ): (1) Estimate future cash flows (2) Estimate discount rate (3) Estimate initial costs (investment) ? NPV>0 Minimum Acceptance Criteria: Accept if NPV > 0 ? Ranking Criteria: Choose the highest NPV Example ? Accept the project because NPV>0. 0123 $50 $100 $150 -$200 (Investment) 2 3 $50 $100 $150 200 (1 15%) (1 15%) (1 15%) $ NPV ?? ? ??? ??? The Payback Period Rule ? How long does it take the project to “ pay back ” its initial investment? ? Payback Period = number of years to recover initial investment ? Minimum Acceptance Criteria is set by management ? Ranking Criteria is also set by management ? Example: Initial Investment =$200 Project A : Project B : CF(Year 1)=$50 CF(Year 1)=$50; CF(Year2)=$150 CF(Year2)=$100; CF(Year3)=$100 CF(Year 3)=$250 ? Payback Period (A) Payback Period (B) = 2 Years =2 + (200-150)/250 = Years The Discounted Payback Period Rule ? How long does it take the project to “ pay back ” its initial investment tak