財務成本管理英語04

1、2008年注冊會計師考試輔導財務成本管理英語 第14頁INVESTMENT APPRAISAL對應中文教材2008年財務成本管理第五章:投資管理A.ROCE（已動用資本回報率）or ARR（會計收益率）（Accounting Rate of Return）B.PPaybbackk（回收收期法）Payback period=Initial payment/Annual cash inflow, payback is not always an exact number of yearsMost common formula:ROCE=EBIT （after depreciation）/ init

2、ial capital costsC NNPV（凈凈現(xiàn)值法法）（1） Bassic asssumpptioons:cassh ooutllay occcurss inn yeear 0 （nnow）.cassh fflowws ooccuur aat tthe endd off thhe yyearr.iff a cassh ffloww occcurrs aat tthe begginnningg off a yeaar, it is asssumeed tto ooccuur aat tthe endd off thhe pprevviouus yyearr.D IIRR（內(nèi)內(nèi)含報酬酬率法

3、）（1）BBasiic pprinncipple: IRRR iis tthe cosst oof ccapiitall att whhichh thhe NNPV is zerro, if thee exxpecctedd IRRR iis hhighher thaan aa taargeet rratee off reeturrn; thee prrojeect is finnancciallly worrth undderttakiing.（2）SSeleectiion bettweeen IIRR andd NPPV: wheen aa chhoicce hhas to be madd

4、e bbetwweenn muutuaallyy exxcluusivve pprojjectts, in succh ccasee thhe NNPV shoouldd bee seelecctedd, bbecaausee hiigheer NNPV cann maaximmizee shhareehollderrs weaalthh.DeffiniitioonThee diiscoountt raat wwhicch, wheen aapplliedd too thhe ccashh fllowss off a proojecct, givves an NPVV off zeero.OO

5、rThee brreakk-evven inttereest ratte ffor a pprojjectt.It is thee maaximmum ratte oof iinteeresst tthatt yoou ccoulld aaffoord to payy onn a proojecct wwithhoutt maakinng aa looss.FFeattureesAdvvanttagees -Takkes intto aaccoountt thhe ttimee vaaluee off mooneyy-Rellatiive meaasurre-Moore reaadilly u

6、undeersttoodd thhan NPVVDDisaadvaantaagess -MMay nott bee unniquue prrojeectss caan hhavee moore thaan oone IRRR- Maay rrankk prrojeectss inncorrrecctlyy forr muutuaallyy exxcluusivve pprojjectts oor wwhennFFundds aare shoort suppplyy- Caannoot ccopee wiith chaangiing rattes of inttereestThee meetho

7、od oof ccalcculaatioon ddepeendss uppon wheetheer oor nnot thee prrojeect hass evven cassh fflowws.Evven cassh fflowwsConnsidder an invvesttmennt oof 39.93mm thhat genneraatess neet ccashh eaarniingss off 110m forr 5 yeaarsThhe IIRR is thee diiscoountt raate thaat ggivees aa NPPV oof zzeroo. TThiss

8、meeanss thhat thee IRRR iis ttheRaate thaat wwilll diiscoountt fiive insstalllmeentss off 110m to a ppressentt vaaluee off 339.993. Thiis iin tturnnMMeanns tthatt thhe IIRR is thee diiscoountt raate forr whhichh thhe 55yeaar aannuuityy faactoor iis 33.9993. AThee prrojeects IIRR hass beeen fouund vi

9、aa a cummulaativve ddisccounnt ffacttor （annnuiity facctorr） ggiveenBy: AAnnuuityy faactoorat thee IRRR=ffor thee liife of thee prrojeectUnneveen ccashh fllowssTThesse hhavee too bee fooundd byy trriall annd eerroor oor bby eestiimattingg ussingg twwo ppressentt vaaluees.Wheere:A=lloweer rratee chho

10、seen=NNPV at ratte AABB=hiigheer rratee=NPPV aat rratee BItt heelpss too geet AA annd BB ass cllosee too thhe ttruee IRRR aas pposssiblle, butt itt dooesnnt mattterr whhethherthhe rresuultaant NPVVs aare possitiive, neegattivee orr onne oof eeachh.Somme sstuddentts ppreffer to usee a commmonn seense

11、e appprooachh raatheer tthann a forrmulla. Seeeingg byy noowMucch NNPV hass faalleen （ffrommto） as thee diiscoountt raate hass riisenn frrom A tto BB,Theey ffindd hoow mmuchh moore thee diiscoountt raate neeeds to risse tto bbrinng tthe NPVV too zeero.WWhettherr thhe fformmulaa iss ussed or commmonn

12、 seensee, tthe callcullatiion asssumees aa liineaar rrelaatioonshhipBeetweeen NPVV annd ddisccounnt rratee. IIn ffactt thhe rrelaatioonshhip is nott liineaar, hennce thee caalcuulattionnIIs oonlyy appprooximmatee annd （uunleess youu haave beeen lluckky wwhenn guuesssingg whhichh diiscoountt raatess

13、toouuse） youu shhoulld nnot quoote IRRRs callcullateed iin tthiss waay tto mmanyy, nnot to anyy,deecimmal plaacess unnlesss tthe exaaminner askks yyou.IIRR of a pperppetuuityyTThe preesennt vvaluue oof aa peerpeetuiity is thee annnuaal ccashh fllow divvideed bby tthe disscouunt ratte（exxpreesseed aa

14、s aa deecimmal. Frrom thiis iit ffolllowss thhat:tthe IRRR off a perrpettuitty =1000Perrpettuitty: 永續(xù)年年金Metthodd off prreseentaatioonA ssimpple callcullatiion succh aas tthosse ffor Wooods cann bee doone on a ssinggle linne. Forr laargeer pprojjecttstwoo poossiibillitiies exiist:（ii） tthe cassh bbud

15、gget appproaach（iii） thee taabullar appproaach.（11）Caash buddgett appprooachhTTimee0012330000000000000000Invvesttmennt（XX） XAdvverttisiing （XX） （X） -Woorkiing cappitaal （XX） -XMaaterrialls （XX） （X） （X） -Labbourr （XX） （XX） （XX）Oveerheeadss （X） （X） （X）Revenue X Net cash flow （X） （X） （X） X y% Discount

16、factor1 X X XPresent value （X） （X） （X） XNet present value （000）XThe cash budget approach is suitable for short projects with lots of different cash flowsWhich change from year to year.（2） Tabular approachTimeCash flowy% DiscountPresent value0000000000Investment（X）1（X）0and 1 Advertising （X）X（X）0Worki

17、ng capital （X）1（X）0-9Materials （X）1（X）1-10Labour and overheads （X）X（X）1-10Revenue X XX10Sales proceedsX XX10WC recovery X XXNet present value （000）XThe tabular approach is suitable for long projects with lots of different cash flows that areThe same from year to year （enabling annuity factors to be

18、used）.Picking the right figuresWhen carrying out discounted cash flow analysis it is important to select the right figures.Ignore:1.Sunk costs amounts that have already been spent2.Depreciation not a cash flow3.Book values not a cash flow4.Nonincremental fixed costs （look out for the words “reapport

19、ioned fixed overheads”）5.Interest costs taken into account by the discounting processInclude:Those cash flows that are specifically received or incurred as a result of the acceptance of the project（futureincrementalcash flows）.Asset replacement decisionFactors to be considered when making replacemen

20、t decision are as follows:capital cost of new equipment;operating costs, increased repair and maintenance costs;loss of productivity;lower of quality and quantity of output;Onee apppliicattionn off diiscoountted cassh ffloww iss too maake deccisiionss coonceerneed wwithh thhe rrepllaceemennt oofMacc

21、hinneryy. TThiss apppliies to shoort llifee asssetts tthatt wiill neeed tto bbe rrepllaceed iin pperppetuuityy （ee.g. mootorrCCarss orr phhotoocoppierrs）. Ass a macchinne ggetss ollderr, iit iis llikeely to cosst mmoree too keeep it runnninng aand itssSScraap vvaluue wwilll deecreeasee. TThe aimm iss too fiind thee opptimmal repplaccemeent cy