8

Finance (Fach) / FCF (Lektion)

<3

Diese Lektion wurde von Janaw55 erstellt.

Lektion lernen

Diese Lektion ist leider nicht zum lernen freigegeben.

zurück  |  weiter 1 / 1

  • Depreciation Tax Shield Depreciation * Tax Rate Income shielded from taxes, because of depreciation
  • Capital Gains Gain itself is no Cash Flow Selling Price = Book Value -> CF= Selling Price  Selling Price  < Book Value -> CF= Selling Price + T * Loss Selling Price > Book Value -> CF= Selling Price + T * Gain
  • Increase in WC INvestment in inventory is not tax deductible  Annual Raw Material * 2/52 + Finished Products 
  • Principles of Valuing Cash Flows (1) Discount Cash Flows, Not Profit! 1. Discount cash flows, not profits! Concentrate on cash flows after taxes. Stay alert for differences between tax depreciationand depreciation used in reports to shareholders. Remember investment in WC. As sales increase, the firm may need to make additional investments in WC, and as the project comes to an end, it will recover those investments. Depreciation is not a cash flow (though it may affect tax payments). Beware of allocated overhead charges for heat, light, and so on. These may not reflect the incremental costs of the project. Exclude debt interest or the cost of repaying a loan from the project cash flows --> helps to separate investment from the financing decision.
  • Principles of Valuing Cash Flows (2) Estimating Incremental Cash Flows Estimate the project’s incremental cash flows as the difference between the cash flowswith the project and those without the project. Include all indirect effects of the project, i.e. impact on the sales of firm’s otherproducts. Forget sunk costs. Include opportunity costs, i.e. value of land that you would otherwise sell..
  • 3. Treat inflation consistently. 3. Treat inflation consistently. a. If cash flows are forecasted in nominal terms, use a nominal discount rate. b. Discount real cash flows at a real rate.
  • Net Working Capital Cash + Inventory + Acc. Receivables - Payables
  • Working Capital Current Assets - Current Liabilities Changes (1) Price Change (2) Physical Stock Changes
Anzeige

zurück  |  weiter 1 / 1