1、吧CONCEPT邦 QUESTI叭ONS - C扳HAPTER 壩1柏邦What ar凹e the t哎hree ba熬sic que傲stions 翱of corp拔orate f盎inance?頒凹頒a.礙奧Investm板ent dec爸ision (拌capital耙 budget澳ing): W拌hat lon靶g-term 把investm巴ent str拌ategy s般hould a氨 firm a辦dopt?搬b. Fi熬nancing唉 decisi扒on (cap岸ita礙l struc八ture): 百How muc哀h cash 按must be笆 raised暗 f

2、or th熬e 斑 r矮equired奧 invest吧ments?埃Short-t巴erm fin俺ance de艾cision 捌(workin般g capit唉al): Ho版w much 熬short-t佰erm cas扳h flow 背does co懊mpany n挨eed to 氨pay its笆 bills.藹百 愛Describ擺e capit絆al stru鞍cture.壩Capital耙 struct壩ure is 擺the mix暗 of襖 differ班ent sec唉urities般 used t藹o finan凹ce a fi傲rms in熬vestmen藹ts.藹

3、 爸 白 霸List th氨ree rea板sons wh斑y value奧 creati翱on is d傲ifficul案t.拌Value c柏reation壩 is dif埃ficult 爸because皚 it is 襖not eas哀y to ob辦serve c白ash flo疤ws dire耙ctly. 盎The rea叭sons ar暗e:伴a. Cas靶h flows吧 are so敗metimes跋 di爸fficult哀 to ide骯ntify.芭b. The伴 timing般 of cas翱h flows案 is dif拔ficult 稗to dete佰rmine.愛c

4、. Cas擺h flows盎 are un板certain俺 and th擺erefore爸 risky.把1.2八 安疤What is拜 a cont巴ingent 頒claim?埃A conti搬ngent c拌laim is拔 a clai拔m whose扳 payoff傲s are d案ependen背t on th耙e value扒 of the按 firm a拔t the e襖n絆d of th頒e year.靶 In mo拔re gene霸ral ter把ms, con瓣tingent皚 claims邦 depend藹 on the巴 value 版of an u擺nderlyi

5、佰ng asse翱t.岸 叭 巴扳Describ襖e equit矮y and d熬ebt as 熬conting絆ent cla邦ims.耙Both de罷bt and 斑equity 頒depend 半on the 跋value o懊f the f扳irm. I耙f the v斑alue of叭 the fi傲rm is g矮reater 白than t絆he amou唉nt owed扳 to deb矮t holde澳rs, the芭y will 鞍get wha胺t the f壩irm owe辦s them,唉 while 礙stockho氨lders w背ill get骯 the di扮

6、fferenc盎e. But哀 if the耙 value 伴of the 佰firm is案 less t鞍han equ愛ity, bo版ndholde昂rs will矮 get th敗e value氨 of the把 firm a班nd equi拔ty hold扒ers not班hing.瓣1.3邦 般 吧盎Define 跋a 胺proprie隘torship爸, a par叭tnershi骯p and a吧 corpor芭ation.笆A propr隘ietorsh百ip is a拜 busine胺ss owne白d by a 搬single 罷individ拌ual wit班h un

7、lim皚ited li白ability版. A pa礙rtnersh耙ip is a矮 busine辦ss owne佰d by tw霸o or mo絆re indi愛viduals氨 with u安nlimite耙d liabi疤lity. 扒A corpo岸ration 八is a bu拔siness 氨whic稗h is a 哎legal 昂person藹 with m盎any lim敗ited li板ability爸 owners疤.啊 爸 案 癌絆What ar擺e the a柏dvantag襖es of t絆he corp佰orate f案orm of 爸busines拔s orga

8、n凹ization罷?伴案Limited邦 liabil辦ity, ea壩st of o俺wnershi隘p trans藹fer and擺 perpet百ual suc班cession胺.唉1.4耙 叭白What ar埃e the t拌wo type斑s of ag氨en跋cy cost擺s?襖班Monitor邦ing cos把ts of t白he shar藹eholder辦s and t隘he ince敗ntive f罷ees pai襖d to th霸e manag唉ers.柏 把 柏懊How are盎 manage唉rs bond邦ed to s挨harehol捌ders?佰Shareho

9、氨lders d熬etermin隘e the m靶embersh哀ip to t哎he boar半d of di叭rectors搬, which俺 select扳s manag背ement.隘Managem伴ent con瓣tract白s and i胺ncentiv般es are 白build i挨nto com奧pensati澳on arra盎ngement唉s.半If a fi奧rm is t巴aken ov霸er beca敖use the澳 firms瓣 price 哎dropped敖, manag辦ers cou瓣ld lose佰 their 擺jobs.啊Competi翱tion i

10、n拌 the ma耙nageria壩l labor邦 market擺 makes 隘manager懊s perfo斑rm in t啊he best把 intere哎st of s啊tockhol白ders.矮 氨 拜耙Can you昂 recall扮 some m骯anageri傲al goal稗s?扒阿Maximiz拜ation o傲f corpo熬rate we拜alth, g澳rowth a藹nd comp按any siz藹e.啊 背 捌艾What is爸 the se罷t-of-co稗ntracts白 perspe敖ctive?拜The vie叭w of th伴e corpo斑rati

11、on 伴as a se骯t of co癌ntracti爸ng rela凹tionshi辦ps amon爸g indiv伴iduals 爸who hav澳e co盎nflicti胺ng obje拜ctives.背1.5昂 阿傲Disting把uish be版tween m巴oney ma敖rkets a奧nd capi背tal mar罷kets.愛Money m頒arkets 扮are mar懊kets fo愛r debt 拌securit皚ies tha唉t pay o奧ff in l哀ess tha笆n one y澳ear, wh斑ile cap稗ital ma頒rkets a澳re mar

12、k拜ets for耙 long-t般erm deb敗t and e耙quity s佰hares.鞍 壩 拔扒Wha捌t is li伴sting?瓣Listing凹 refers芭 to the安 proced絆ures by百 which 唉a compa凹ny appl礙ies and爸 qualif暗ies so 瓣that it擺s stock氨 can be爸 traded跋 on the霸 New Yo埃rk Stoc擺k Excha傲nge.暗 藹 哎凹What is岸 the di百fferenc拔e betwe艾en a pr懊imary m拔arket a俺nd a se柏c

13、ondary斑 market叭?唉The pri斑mary ma埃rket i耙s the m白arket w百here is安suers o埃f secur暗ities s半ell the澳m for t稗he firs八t time 胺to inve叭stors, 霸while a礙 second凹ary mar安ket is 襖a marke半t for s斑ecuriti拜es prev哎iously 澳issued.罷CONCEPT啊 QUESTI耙ONS - C八HAPTER 艾2奧2.1氨 罷耙What is皚 the ba挨lance-s耙heet eq拌uation?案佰As

14、sets 挨= Liabi耙lities 礙+柏 Stockh半olders笆 equity斑 擺 絆阿What th搬ree thi拔ngs sho襖uld be 扳kept in昂 mind w阿hen loo稗king at矮 a bala敖nce she拌et?稗礙Account澳ing liq按uidity,板 debt v佰s. equi叭ty, and盎 value 跋vs. cos板t.挨2.2邦 背笆What is啊 the in胺come st吧atement般 equati擺on?俺叭Revenue愛 - expe按nses = 稗Income扳癌What ar唉e th

15、e t佰hree th柏ings to按 keep i壩n mind 班when lo笆oking a壩t an in斑come st跋atement壩?襖General八ly Acce搬pted Ac隘countin挨g Princ凹iples (氨GAAP), 芭noncash哎 items,版 and ti骯me and 矮costs.柏 八 半伴What ar挨e nonca扳sh expe挨nses?百Noncash愛 expens爸es are 板items i白ncluded扮 as exp安enses b拜ut whic矮h do n捌ot dire矮ctly af凹fect

16、ca瓣sh flow靶. The 唉most im礙portant頒 one is皚 deprec皚iation.暗2.3拜 芭隘What is礙 net wo絆rking c斑apital?岸擺It is t阿he diff熬erence 鞍between敗 curren昂t asset靶s and c邦urrent 捌liabili按ties.挨 挨 拔氨What is頒 the ch八ange in澳 net wo班rking c礙apital?礙To dete八rmine c熬hanges 澳i敖n net w搬orking 翱capital翱 you su伴btract 瓣uses

17、of佰 net wo敗rking c安apital 敗from so熬urces o辦f net w敖orking 叭capital昂.藹2.4 暗岸How is 敖cash fl笆ow diff靶erent f絆rom cha版nges in般 net wo巴rking c翱apital?案The dif邦ference耙 betwee扒n cash 辦flow an襖d chang般es in n敖ew work襖ing cap把ital is捌 that s捌ome t霸ransact傲ions af罷fect ca捌sh flow哀 and no皚t net w背orking 拜cap

18、ital版. The 搬acquisi哀tion of壩 invent澳ories w笆ith cas拔h is a 俺good ex阿ample o藹f a cha敗nge in 瓣working擺 capita奧l requi把rements辦.艾斑What is氨 the di藹fferenc頒e betwe拔en oper骯ating c凹ash flo盎w and t靶otal ca扮sh flow霸 of the辦 firm?癌The ma癌in diff瓣erence 吧between皚 the tw啊o is ca絆pital s拔pending隘 and ad翱ditions

19、罷 to wor擺king ca矮pital, 澳that is按, inves稗tment i鞍n fixed胺 assets壩 and i隘nvestme愛nt in 敖working敗 capita百l.般CONCEPT敖 QUESTI藹ONS - 佰CHAPTER扒 3霸3.1 按搬What is岸 an int敖erest r斑ate?壩It is t柏he paym鞍ent req礙uired b胺y 襖the len瓣der of 白money f把or the 捌use of 懊it duri傲ng a de隘termine癌d perio柏d of ti邦me. It骯 is

20、 exp稗ressed 埃in perc皚entage.扮邦 What a敖re inst瓣itution吧s that 懊match b白orrower暗s and l壩enders 斑called?斑艾They ar胺e calle阿d finan扒cial in骯stituti隘ons.鞍叭What do懊 we mea懊n when 懊we say 藹a marke阿t cle罷ars? W柏hat is 佰an equi襖librium襖 rate o埃f inter霸est?跋A marke瓣t clear挨s if th按e amoun骯t of mo愛ney bor叭rower

21、s 叭want to按 borrow壩 is equ罷al to t矮he amou礙nt lend暗ers wis吧h to le鞍nd. An敗 equili稗brium r芭ate of 板interes皚t is th拜e inter澳est rat頒e at wh靶ich mar藹kets cl唉ear.扳3.2 礙版How doe鞍s an 藹individ白ual cha扒nge his瓣 consum叭ption a哀cross p骯eriods 爸through巴borrowi稗ng and 柏lending翱.笆By borr搬owing a敖nd lend搬ing dif

22、扮ferent 柏amounts啊 the pe隘rson ca斑n achie拜ve any 背of all 頒consump襖tion po隘ssibili疤ties av霸ailable把.班 吧 按絆How do 艾interes扳t rate 百changes搬 affect胺 ones 翱degree 疤of傲 impati愛ence?昂A perso拜ns lev藹el of p岸atience邦 depend氨s upon 骯the int背erest r暗ate he 佰or she 扮faces i暗n the m敖arket. 般 A pers扳on eage盎r to

23、bo愛rrow mo俺ney at 胺a low i氨nterest骯 rate w盎ill bec笆ome les熬s eager安 if tha背t inter扒est rat佰e is ra柏ised an骯d may p昂refer t搬o 鞍lend佰 money 叭to take跋 advan白tage of把 higher百 intere班st rate板s.百3.3 跋伴What is般 the mo俺st impo哀rtant f拔eature 唉of a co俺mpetiti跋ve fina邦ncial m稗arket?阿No inve拜stor, i按ndividu辦al

24、 or c啊orporat岸ion can懊 have a百 signif哎icant e跋ffect o瓣n total瓣 lendin翱g or on霸 intere敗st rate敖s. The澳refore,扒 invest吧ors are罷 price 扒taker愛s.盎 吧 把敗What co敗ndition皚s are l背ikely t白o lead 安to this八?哀Trading阿 is cos案tless.哎Informa翱tion ab罷out bor啊rowing 拜and len扳ding op扒portuni白ties is壩 availa叭ble板Ther

25、e a阿re many壩 trader罷s.凹3.4 扒搬Describ澳e the b辦asic fi礙nancial辦 princi盎ple of 絆investm扳ent dec辦ision-m霸aking?愛An inve艾stment 凹project敗 is wor扒th unde藹rtaking笆 only i跋f it is斑 mores 安desirab邦le than巴 what i壩s avail跋able in板 the fi挨nancial啊 market靶s.八3.5 瓣哎Describ辦e how t熬he fina白ncial m罷arkets 癌can be

26、扮used to哀 evalua凹te inve埃stment 板alterna鞍tives?百The fin暗ancial 矮markets斑 can be岸 used a班s a ben班chma氨rk. If頒 the pr般oposed 骯investm敖ent pro頒vides a霸 better挨 altern哀ative t阿han the芭 financ吧ial mar把kets, i啊t shoul礙d be un扒dertake背n.笆 百 跋爸What is挨 the se吧paratio爸n theor安em? Wh隘y is it翱 import拌ant?捌The

27、sep安aration板 theore稗m says 巴that th愛e decis唉ion as 澳to whet八her to 鞍underta稗ke a p霸roject 岸(compar邦ed to t背he fina巴ncial m凹arkets)俺 is ind盎ependen俺t of th癌e consu澳mption 安prefere頒nces of哀 the in瓣dividua佰l. It 藹is impo頒rtant b癌ecause 笆we can 翱make in案vestmen按t decis俺ions ba挨sed on 岸objecti啊ve data百,

28、disre壩garding擺 person敗al pref昂erences壩.版3.6 奧爸Give th壩e defin罷itions瓣 of net瓣 presen霸t value拔, futur白e value班 and pr皚esent v霸alue?爸New pre安sent va愛lue is 礙the dif藹ference皚 in pre板sent va拔lue ter班ms betw罷een cas稗h inflo癌ws and 啊cash ou把tflows.挨 Given唉 the fi伴nancial拜 market疤, the f八uture v矮alue is澳 a

29、n amo絆unt equ背ivalent背 to the案 amount敖 curren拔tly hel挨d, an襖d prese巴nt valu昂e is th靶e amoun霸t equiv絆alent n暗ow to a哎n amoun百t to be罷 receiv捌ed or g案iven in叭 the fu霸ture.敖 鞍 拌奧What in爸formati凹on does案 a pers敖on need版 to com暗pute an啊 invest敖ments 鞍net pre澳sentvalue?疤扒Cash in壩flows, 敖cash ou氨tflows 背an

30、d an 斑interes拌t or di伴scount 拜rate.罷3.敗7 隘 盎白In term拜s of th敗e net-p扳resent-般value r愛ule, wh岸at is t柏he esse捌ntial d跋ifferen拌ce 把between敗 the in凹dividua奧l and t霸he corp骯oration白.隘班百The mai班n diffe昂rence i啊s that 隘firms h敖ave no 安consump愛tion en癌dowment氨.埃CONCEPT罷 QUESTI襖ONS - 罷 CHAPTE癌R 4擺4.1 奧爸Defi

31、ne 懊future 礙value 靶and pre般sent va愛lue.霸Future 熬value i耙s the v扮alue of澳 a sum 敗after i霸nvestin扒g over 辦one or 皚more pe跋riods. 暗 Presen邦t value礙 is the鞍 value 唉today o邦f cash 哎flows t笆o be re班ceived 矮in the 艾future.唉 懊 白八How doe愛s one u靶se net 敗present跋 value 捌when ma岸king an埃 invest稗ment de背cision?

32、霸One det拌ermines擺 the pr班esent v疤alue of澳 future捌 cash f叭lows an稗d then 叭subtrac阿ts the 矮cost of叭 the in凹vestmen班t. If 斑this va邦lue is 襖positiv半e, the 凹investm安ent sho半uld be 唉underta艾ken. I爸f the N半PV is n靶egative壩, then 搬the inv岸estment捌 should熬 be rej安ected.辦4.2 壩昂 What i柏s the d稗ifferen邦ce betw唉

33、een sim隘ple int岸erest a岸nd comp暗ound in版terest?矮With si罷mple in皚terest,盎 the in胺terest 愛on the 傲origina版l inves襖tment i礙s not r愛einvest骯ed. Wi扒th comp邦ound in敖terest,哀 each i拔nterest皚 paymen版t is re敗investe隘d and o鞍ne earn搬s inter俺est on 暗interes盎t.敖 壩 俺按What is懊 t八he form熬ula for搬 the ne斑t prese拔nt

34、 valu搬e of a 百project班?案伴 愛 骯 巴 阿邦 把T哎稗NPV = 俺 -C懊0骯 + 把 C搬t拜 /(1+I)白t翱 唉 艾 艾 伴t=1哎4.3 懊邦What is岸 a stat稗ed annu吧al inte哎rest ra埃te?啊The sta辦ted ann藹ual int扳erest r佰ate is 伴the ann埃ual int擺erest r礙ate wit奧hout 暗conside挨ration 笆of comp瓣ounding哎.扒 皚 盎翱What is拜 an eff艾ective 熬annual 扒interes絆t rate?版An

35、 effe柏ctive a壩nnual i板nterest半 rate i拌s a rat笆e that 哎takes c辦ompound半ing int俺o accou案nt.爸扳What is扮 the re案lations八hip bet挨ween th哀e state岸d annua俺l inter襖est rat安e and t版he effe昂ctive a耙nnu班al inte隘rest暗 哀rate?吧罷Effecti鞍ve annu捌al inte阿rest ra敗te = (1埃 + (r/m扳) )擺m罷 - 1.安 版 矮暗Define 捌continu絆ous co

36、m班poundin阿g.板絆Continu哎ous com哀poundin版g compo澳unds in哎vestmen矮ts ever凹y insta鞍nt.昂4.4 礙吧What ar挨e the f挨ormulas絆 for pe絆rpetuit隘y, grow癌ing-per阿petuity俺, annui吧ty, and拌 氨growing敖 annuit霸y懊?扳斑Perpetu暗ity: P靶V = C/r靶疤 Gro扒wing Pe柏rpetuit唉y: PV 罷= C/(r-伴g)礙胺Annuity把: PV =哎 (C/r) 白1-1/(1辦+r)辦T岸阿埃Growing

37、百 Annuit扳y: PV 哀= C/(r胺-g) 1吧-(1+g)斑 / (1+r白)背T胺 耙昂礙What ar頒e three邦 import挨ant poi隘nts con班cerning扒 the gr罷owing p哀erpetui襖ty form白ula?敖The num壩erator.百The int癌erest r扳ate and皚 the gr皚owth ra白te.氨The tim哀ing ass叭umption礙.罷敖扳What ar般e four 八tricks 岸concern捌ing ann拌uities?氨A delay頒ed annu芭ity.芭An ann

38、u胺ity in 鞍advance拔An infr版equent 版annuity艾The equ艾ating o唉f prese爸nt valu藹es of t案wo annu案ities.伴CONCEPT版 QUESTI擺ONS - C邦HAPT跋ER 5班5.2阿艾叭Define 拌pure di盎scount 跋bonds, 澳level-c啊oupon b拌onds, a八nd cons骯ols.哀A pure 背discoun敖t bond 伴is one 阿that ma骯kes no 岸interve礙ning in哀terest 邦payment疤s. One版 receiv

39、般es a si鞍ngle lu案mp sum 昂payment艾 at mat敗urity. 捌 A leve皚l-coupo頒n bond 辦is a co矮mbinati昂on of a扳n annui八ty and 絆a氨 lump s頒um at m矮aturity俺. A co半nsol is壩 a bond班 that m叭akes in礙terest 斑payment礙s forev霸er.啊拌盎Contras瓣t the s胺tate in八terest 拜rate an啊d the e敗ffectiv拌e annua埃l inter柏est rat爸e for b隘onds

40、 pa白ying se半mi-annu皚al inte隘rest.藹Effecti瓣ve annu礙al inte靶rest ra壩te on a絆 bond t哎akes in八to acco啊unt 爸two per板iods of矮 compou絆nding p伴er year笆 receiv霸ed on t瓣he coup柏on paym哎ents. 按The sta襖te rate拜 does n絆ot take骯 this i頒nto acc芭ount.盎5.3安稗矮What is扮 the re拌lations藹hip bet邦ween in凹terest 板rates a八nd

41、 bond氨 prices疤?斑伴把There i爸s an in壩verse r埃elation般ship. 翱When on熬e goes 拜up, the邦 other 藹g懊oes dow疤n.笆挨般How doe壩s one c埃alculat礙e the y按ield to扳 maturi埃ty on a般 bond?般One fin霸ds the 頒discoun耙t rate 背that eq爸uates t澳he prom皚ised fu啊ture ca哀sh flow啊s with 襖the pri爸ce of t拔he bond扳.唉5.8板岸隘What ar奧e the

42、 t暗hree fa板ctors d拔etermin吧ing a f岸irms P疤/E rati稗o?艾Todays跋 expect翱ations柏 of fut白ure gro隘wth opp把ortunit扮ies.邦The dis柏count r隘te.拔The acc耙ounting辦 method扳.扒5.9翱傲愛What is隘 the cl安osing p班rice of按 Genera礙l Data?艾矮扒The clo艾sing pr拔ice of 罷General捌 Data i盎s 6 3/1熬6.俺胺邦What is岸 the PE捌 of Gen藹eral Ho啊u

43、se?疤懊巴The PE 唉of Gene霸ral Hou吧se is 2暗9.俺捌扮What is白 the哎 annual翱 divide隘nd of G癌eneral 胺Host半?頒安埃The ann拔ual div瓣idend o伴f Gener敖al Host昂 is zer柏o.岸CONCEPT扮 QUESTI皚ONS - A吧ppendix半 to Cha白pter 5皚絆芭What is翱 the di八fferenc稗e betwe瓣en a sp瓣ot inte骯rest ra拜te and 罷the yie伴ld to m背aturity吧?柏The yie般ld to

44、 m把aturity瓣 is the盎 geomet骯ric ave瓣rage o罷f the s巴pot rat按es duri壩ng the 藹life of澳 the bo唉nd.伴安隘Define 奧the for靶ward ra敗te.瓣Given a凹 one-ye胺ar bond斑 and a 骯two-yea瓣r bond,扮 one kn白ows the啊 spot r安ates fo哎r both.按 The f鞍orward 癌rate is愛 the ra隘te of r安eturn i芭mplicit艾 on a o佰ne-year拔 bond p爸urchase跋d

45、 in th靶e secon昂d year 頒that w版ould eq扳uate th俺e termi稗nal wea矮lth of 唉purchas癌ing the疤 one-ye翱ar bond跋 today 翱and ano稗ther in瓣 one ye百ar with俺 that o拜f the t唉wo-year板 bond.岸傲 氨巴What is芭 the re巴lations扒hip bet鞍ween th襖e one-y胺ear spo骯t rate,扮 the tw昂o-year 疤spot ra稗te and 吧the for瓣ward ra百te over八 th

46、e se搬cond ye斑ar?斑佰按The for昂ward ra八te f八2辦 = (1瓣+r疤2稗)拌2阿 /(1+r板1 凹) - 1疤襖罷What is案 the ex敗pectati靶on hypo伴thesis?搬Investo笆rs set 辦interes懊t rates霸 such t瓣hat the哀 forwar俺d rate 頒over a 敖given p襖eriod e扒quals t把he spot半 rate f佰or that敖 period板.霸挨背What is敖 the li稗quidity靶-prefer般ence hy絆pothesi艾s?絆Th

47、is hy礙pothesi襖s maint扳ains th皚at inve辦stors r拌equire 佰a risk 背premium皚 for ho辦lding l疤onger-t柏erm bon艾ds (i.e瓣. they 唉prefer 絆to be l敖iquid o哀r short骯-term i按nvestor骯s). Th白is impl跋ies tha八t the m哎arket s愛ets the辦 forwar岸d rate 吧for a g捌iven pe百riod ab啊ove the八 expect暗ed spot柏 rate f絆or that巴 per襖io

48、d.懊CONCEPT辦 QUESTI瓣ONS - C瓣HAPTER 八6巴6.2擺敗哎List th皚e probl啊ems of 骯the pay拌back pe絆riod ru頒le按.拜It does芭 not ta扳ke into藹 accoun拜t the t扮ime val靶ue of m挨oney.柏It igno絆res pay安ments a哎fter th八e payba吧ck peri翱od.翱The cut柏off per盎iod is 笆arbitra鞍ry.愛哀扳What ar八e some 襖advanta礙ges?半It 背is simp半le to i按mpl

49、emen斑t.頒It may 翱help in叭 contro俺lling a挨nd eval翱uating 愛manager背s.靶6.4半敗班What ar百e the t瓣hree st巴eps in 愛calcula捌ting AA柏R?凹Determi挨ne aver百age net巴 income班.哎Determi唉ne aver霸age inv傲estment巴Divide 襖average搬 net in氨come by挨 averag半e inves白tment.背扒艾What ar白e some 捌fl伴aws wit扳h the A版AR appr八oach?靶It u

50、ses扳 accoun邦ting fi伴gures.霸It take頒s no ac傲count o岸f timin癌g.扳The cut半off per安iod is 奧arbitra矮ry.愛6.5凹暗罷How doe伴s one c白alculat澳e the I愛RR of a襖 projec絆t?笆Using e奧ither t辦rial-an芭d-error搬 or a f奧inancia奧l calcu挨lator, 俺one fin奧ds the 藹discoun藹t rate 埃th瓣at prod瓣uces an愛 NPV of敖 zero.盎6.6拔澳按What is案

51、the di吧fferenc頒e betwe挨en inde跋pendent凹 projec絆ts and 爸mutuall疤y exclu鞍sive俺罷壩project霸s?百An inde罷pendent絆 projec板t is on扳e whose吧 accept唉ance do扮es not 拔affect 阿the acc鞍eptance罷 of ano柏ther. 捌A mutua翱lly exc岸lusive 叭project百, on th拔e other疤 襖hand is拌 one wh背ose acc啊eptance阿 preclu笆des the搬 accept扒an

52、ce of盎 anothe瓣r.敗跋瓣What ar骯e two p壩roblems白 with t凹he IRR 絆approac罷h that 埃apply t熬o both 埃indepen哀dent an阿d mutua安lly exc礙lusive 斑project稗s?傲The dec澳ision r凹ule dep安ends on芭 whethe絆r one i半s inves板ting of隘 financ隘ing.隘Multipl盎e r埃ates of礙 return柏 are po骯ssible.按扮爸What ar安e two a啊ddition爸al prob皚lem

53、s ap凹plying 隘only to捌 mutual扒ly excl奧usive p敗rojects耙?捌The IRR稗 approa藹ch igno俺res iss拔ues of 敗scale.叭The IRR昂 approa唉ch does把 not ac壩commoda罷te the 啊timing 柏of the 搬cash fl扳ows pro般perly.岸6.7拜扳啊How doe岸s one c癌alcu吧late a 疤project阿s prof吧itabili阿ty inde瓣x?扒Divide 擺the pre半sent va班lue of 盎the cas頒h

54、flows暗 subseq埃uent to捌 the in擺itial i罷nvestme氨nt by t芭he init疤ial inv俺estment辦.鞍澳芭How is 頒the pro疤fitabil哀ity ind壩ex appl稗ied to 般indepen藹dent pr唉ojects,氨 mutual俺ly excl翱usive p霸rojects案, and s叭ituatio凹ns埃 of cap擺ital ra疤tioning搬?皚With in澳depende芭nt proj耙ects, a稗ccept t把he proj安ect if 愛the PI 礙is gr

55、ea爸ter tha捌n 1.0 a頒nd reje凹ct if l辦ess tha奧n 1.0.翱With mu叭tually 胺exclusi跋ve proj阿ects, u氨se incr叭emental把 analys埃is, sub扒tractin白g the c稗ash flo藹ws of p耙roject 埃2 from 暗project哀 1. Fi按nd the 暗PI安. If t捌he PI i鞍s great凹er than霸 1.0, a澳ccept p絆roject 哀1. If 扮less th半an 1.0,澳 accept瓣 projec佰t 2.奧In ca

56、pi懊tal rat哎ioning,昂 the fi盎rm shou般ld simp跋ly rank吧 the pr八ojects 絆accordi拌ng to t半heir re鞍spectiv岸e PIs a吧nd acce白pt the 叭project澳s with 癌the hig巴hest PI笆s, subj襖ect to 耙the bud盎get co八nstrain昂.板CONCEPT辦 QUESTI板ONS - C翱HAPTER 昂7岸7.1罷吧芭What ar佰e the t爸hree di把fficult伴ies in 爸determi礙ning in搬crement般

57、al cash敖 flows?邦Sunk co背sts.巴Opportu傲nity co拜sts挨Side ef骯fects.愛鞍邦Define 鞍sunk co胺sts, op安portuni邦ty cost疤s, and 拌side ef拜fects.哎 伴Sunk co罷sts are澳 costs 唉that ha哎ve a罷lready 昂been in矮curred 稗and tha頒t will 凹not be 背affecte岸d by th挨e decis芭ion whe罷ther to昂 undert壩ake the扒 invest俺ment.案Opportu熬nity c

58、o案sts are骯 costs 罷incurre耙d by th愛e firm 岸because胺, if it疤 decide白s to un奧dertake壩 a proj澳ect, it愛 will f暗orego o瓣ther op跋portuni搬ties fo伴r using巴 the as扳sets.爸Side ef凹fects a岸ppear w昂hen a p佰roject 安negativ礙ely aff昂ects ca安sh flow稗s from 背other p鞍arts of白 the fi昂rm.安7.2愛瓣凹What ar搬e the i板tems le鞍ad

59、ing t佰o cash 佰flow in扳 any ye拔ar?靶Cash fl靶ow from半 operat岸ions (r熬evenue-爸operati奧ng cost案s-taxes頒) plus 挨cash fl礙ow of i靶nvestme把nt (cos俺t of ne按w 八machine疤s + cha敖nges in矮 net wo襖rking c奧apital 叭+ oppor哎tunity 般costs).佰搬愛Why did瓣 we det拜ermine 埃income 敗when NP絆V Analy捌sis dis叭counts 癌cash fl拔ows,

60、no瓣t incom班e?礙拔矮Because氨 we nee凹d to de奧termine班 how mu擺ch is p絆aid out把 in tax搬es.扮澳拌Why is 辦working斑 capita按l viewe瓣d as a 笆cash ou阿tflow?疤Because埃 increa板ses in 安working扳 capita跋l must 捌be fund胺ed by c哎ash gen挨erated 暗elsewhe疤re in t捌he firm把.辦7.3扒辦背What is斑 the di靶fferenc暗e betwe隘en the 矮nominal