Corporate Finance: Instructor\'s Manual Applied Corporate Finance

Aswath Damodaran 181 Back to First Principles ! Invest in projects that yield a return greater than the minimum acceptable hurdl ...

Aswath Damodaran 182 Measuring Investment Returns “Show me the money” Jerry Maguire ...

Aswath Damodaran 183 First Principles ! Invest in projects that yield a return greater than the minimum acceptable hurdle rate. ...

Aswath Damodaran 184 Measures of return: earnings versus cash flows ! Principles Governing Accounting Earnings Measurement Accr ...

Aswath Damodaran 185 Measuring Returns Right: The Basic Principles ! Use cash flows rather than earnings. You cannot spend earni ...

Aswath Damodaran 186 Earnings versus Cash Flows: A Disney Theme Park ! The theme parks to be built near Bangkok, modeled on Euro ...

Aswath Damodaran 187 Key Assumptions on Start Up and Construction ! The cost of constructing Magic Kingdom will be $ 3 billion, ...

Aswath Damodaran 188 Key Revenue Assumptions Revenue estimates for the parks and resort properties (in millions) Year Magic King ...

Aswath Damodaran 189 Key Expense Assumptions ! The operating expenses are assumed to be 60 % of the revenues at the parks, and 7 ...

Aswath Damodaran 190 Depreciation and Capital Maintenance Year Depreciation as % Capital Maintenance as % of book value of Depre ...

Aswath Damodaran 191 Other Assumptions ! Disney will have to maintain non-cash working capital (primarily consisting of inventor ...

Aswath Damodaran 192 Earnings on Project Now ( 0 ) 1 2 3 4 5 6 7 8 9 10 Magic Kingdom $ 0 $ 1 , 000 $ 1 , 400 $ 1 , 700 $ 2 , 00 ...

Aswath Damodaran 193 And the Accounting View of Return Year After-tax Operating Income BV of Capital: Beginning BV of Capital: E ...

Aswath Damodaran 194 Estimating a hurdle rate for the theme park ! We did estimate a cost of equity of 9. 12 % for the Disney th ...

Aswath Damodaran 195 Would lead us to conclude that... ! Do not invest in this park. The return on capital of 4. 23 % is lower t ...

Aswath Damodaran 196 From Project to Firm Return on Capital: Disney in 2003 ! Just as a comparison of project return on capital ...

Aswath Damodaran 197 ! Application Test: Assessing Investment Quality ! For the most recent period for which you have data, comp ...

Aswath Damodaran 198 The cash flow view of this project.. To get from income to cash flow, we "added back all non-cash charg ...

Aswath Damodaran 199 The Depreciation Tax Benefit ! While depreciation reduces taxable income and taxes, it does not reduce the ...

Aswath Damodaran 200 Depreciation Methods ! Broadly categorizing, depreciation methods can be classified as straight line or acc ...