BUSF_A01.qxd

Chapter 4 • Investment appraisal methods project when confronted by opposition to that project from other managers who do not ha ...

Investment appraisal methods used in practice International experiences Survey research undertaken in the USA shows that the sam ...

Chapter 4 • Investment appraisal methods Net present value (NPV ) lNPV =the sum of the discounted values of the cash flows from ...

Further reading l Conclusions on PBP: lIt does not relate to shareholders’ wealth; ignores inflows after the payback date. lThe ...

Chapter 4 • Investment appraisal methods 4.1 Is the objective of discounting to take account of inflation? Explain. 4.2 When we ...

Problems Calculate: (a) the net present value for both projects. (b) the approximate internal rate of return for Project A. (c) ...

Chapter 4 • Investment appraisal methods Recently the business has developed a new TV set that has been named Flatview, and a de ...

Problems 4.6 Cool Ltd’s main financial objective is to maximise the wealth of its shareholders. Cool specialises in providing a ...

Chapter 4 • Investment appraisal methods There are a sets of multiple-choice questionsand missing-word questions available on th ...

5.1 Introduction In the previous chapter we established that the most theoretically correct approach to assessing investment opp ...

Chapter 5 • Practical aspects of investment appraisal the points relate equally well to the other techniques for assessing inves ...

Cash flows or accounting flows? Figure 5.1 Six investment projects of a business, all of which operate during at least two accou ...

Chapter 5 • Practical aspects of investment appraisal Provided that the recognition of the timing difference in Example 5.1 (the ...

5.3 Do cash flows really occur at year ends? Discounting cash flows rather than profits does not really mean that depreciation i ...

Chapter 5 • Practical aspects of investment appraisal the effect of systematically understating NPVs. Strictly, it is probably b ...

Taxation Forecasting cash flows Investment appraisal deals with forecasts of future cash flows. Forecasting the cash flows assoc ...

Chapter 5 • Practical aspects of investment appraisal In 2009, Carriers Ltd buys a delivery van for £12,000. The capital allowan ...

Taxation Having considered the basis on which business profits are taxed in the UK, it will be useful to proceed to an example. ...

Chapter 5 • Practical aspects of investment appraisal As is evident from the above, the tax cash flows can, in the case of inves ...

An example of an investment appraisal Consistency of approach In principle it does not matter whether money cash flows or real o ...