Investment Appraisal-Net Prese

IMA Advanced Management Accounting,CIMA考试管理级等级中高级管理会计，同时也适用于自己对于管理会计内容的自学

Investment Appraisal-Net Present Value

• investment decisions
  • financial strategy
    • financing decisions
      • relate to the decisions about where this money comes from, and is primarily about balancing. 三个来源：equity，debt，retained earnings
    • investment decisions
      • relate to where to invest the money
      • 常用决策手段
        • net present value NPV
          • 流入现金流和流出现金流差值的现值
        • internal rate of return IRR
        • payback period
          • the length of time taken for an investment to make a return on the initial expenditure
        • return on capital employed ROCE
          • this compares a company's capital with its earnings
    • dividend decisions
      • assuming investments were well made, funds can be returned to shareholders in the form of dividend payments
        • need to balance the payment of dividends with retention of cash in business to allow for future investment and growth
• net present value NPV
  • relevant net cash flows generated by a project over its total lifetime to calculate a project's net contribution to an organisation.（一定要分辨出相关成本）
    • it reflects the change in wealth of an organisation
  • But，a project shouldn't automatically rejected because it has a negative NPV,or accepted just because it has a positive NPV,we should also consider the company strategy and business model. these may outweigh a decision based purely on the NPV
  • time value of money
    • 计算NPV时，将不同的现金流按照时间归类非常重要
  • effective rate/ cost of capital
  • cash outflows that occur at the beginning of a project occur now; cash outflows or inflows that occur during any particular year are all treated as if they occurred at the end of that financial year
• NPV and working capital
  • As we are only dealing with relevant cash flows, the full amount of working capital is recorded in Year 0 of your calculation and then only the incremental amounts are recorded in subsequent years. At the end of the project the full amount invested will be released.
• Tax in a NPV calculation
  • remember tax is charged against net income, not cash flows（revenue）
  • tax benefit
    • 现根据比率算出扣减的金额，再以这个金额乘以税率算出抵扣的税
    • tax savings 要计入到NPV的计算当中
• NPV within inflation
  • cost of capital
    • real cost of capital
      • is adjusted for inflation in order to reflect the change in the value of money over time,其中未包含inflation，所以可以用来和inflation一起使用计算
    • nominal cost of capital
      • actual amount of money that a company expect to take in and pay out,without any adjustment of inflation,此处不需要因为通货膨胀考虑是因为其中已经包含了inflation
    • 计算
      • （1+ real cost of capital）*(1+general inflation rate)=(1+nominal cost of capital)
      • 也就是：(1+r)*(1+i)=(1+n)
    • 注意：如果在涉及inflation时，如果discount factor是nominal cost of capital，则需要把real cash flow（如果给出的是real的话，需要区分）进行修改，计算出通货膨胀后的价值
  • perpetuities永续年金
    • present value= cash flow/r 或 cash flow*(1/r)
      • perpetuities factor=1/r
  • annuities年金
    • an financial instrument which is purchased for an initial sum which then pays out the same amount each and every year until a definitive end date.
    • cumulative discount factor formula：
      • 然后用年金乘以cumulative discount factor就可以得出这个年金的NPV