• Prior to this class‚ have you: (1) Ever taken a course in Entrepreneurship or Starting New Ventures‚ etc.? (2) Taken a Finance course? (3) Do you have a comfortable‚ working knowledge of the following Finance and Accounting Statements: a) NPV b) IRR c) Free Cash Flow d) Discounted Cash Flow Valuation Method e) Venture
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Answer 1 Is there and adequate market in Gyor? Are rents adequate to support this development? Gyor was chosen as the primary project site by ECE after careful consideration‚ under the assumption that its market was sufficient to support the project. Phillip von Wilmowsky base assumption were that Gyor enjoys strong demographic and economic potential‚ high accessibility and minimal competition. And more specifically‚ these were the main rational points underlined by von Wilmowsky assessment:
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a few key variables regarding the investment and the spreadsheet automatically analyzes its attractiveness. Three traditional investment appraisal methods are used by the IAT. They include: • Pay-back Period • Internal Rate of Return (IRR) • NPV Included in the IAT are two spreadsheets with slightly different functionality. They are named: 1). Automated 2). Manual The main difference between these two worksheets lies in the way each creates future cash flows
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the major evaluation tools used by supervisors as an alternative to NPV. It might be feasible to use mentioned methods during evaluation process as well‚ however each of these methods has very significant shortcomings. For example: Major drawback of IRR is that it states the result in terms of percentage rather than through monetary amounts (variances in scale). Comparison through only percentage results while considering the overall purpose of maximization of shareholders’ wealth can be
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400 2 2‚900 3 2‚850 3 2‚900 4 5‚200 4 5‚550 Discounted Payback Period 3.23 Discounted Payback Period 3.28 NPV $2‚907.51 NPV $2‚905.64 Profitability Index 1.3421 Profitability Index 1.3059 IRR 21.88% IRR 20.62% MIRR 16.51% MIRR 15.72% Crossover Rate 8.16% NPV Profile Data NPV Profile Data Required Return NPV A Required Return NPV B 0% $5‚550.00 0% $5‚750.00 5% $3‚845.43 5% $3‚915
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for E-business Projects Mark Jeffery‚ Northwestern University Introduction The Information Paradox Review of Basic Finance The Time Value of Money ROI‚ Internal Rate of Return (IRR)‚ and Payback Period Calculating ROI for an E-business Project Base Case Incorporating the E-business Project Incremental Cash Flows and IRR Uncertainty‚ Risk‚ and ROI Uncertainty Sensitivity Analysis 1 2 4 4 6 6 7 8 10 11 11 11 Project and Technology Risks Monte Carlo Analysis Applied to ROI Executive Insights The Important
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have different project lives‚ is it o.k. to use NPVs of projects to choose the better one? Why or why not? If it is not o.k.‚ please explain how you can choose the better project. Chapter 13 1. Define NPV and IRR. Explain how decision can be made on projects‚ once you calculate NPV and IRR of
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BERKSHIRE HATHAWAY PURCHASES GEICO WARREN BUFFET Executive Summary Berkshire Hathaway has made a bid for the remaining portion of GEICO stock. This report reviews the offer initiated by Warren Buffett. The details of this report include: • Valuation of GEICO stock. The $70 offer made by Warren Buffett and Berkshire Hathaway includes a 26% premium over the current GEICO stock price of $55.75. This report attempts to determine a range of appropriate stock prices for GEICO. Using the
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the NPV approach is preferred to the IRR approach (2006) The NPV approach takes into account the timing of cash flows and the IRR does not. For example if you took 2 projects that required the same initial outlay and had the same cash inflows for the same period of time but one project was deferred for one year‚ using the NPV we would have different values but the IRR would give us the same. The NPV approach takes into account the scale of the project and the IRR does not. For example The NPV approach
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A PROJECT REPORT ON RISK ANALYSIS OF REBUILDING OFCOKE OVEN BATTERY NUMBER 4 OF ROURKELA STEEL PLANT STEEL AUTHORITY OF INDIA LIMITED (SAIL) Prepared by: Vineet Bhatia PGDM Roll No. 117 BIMTECH Corporate Guide: Academic Guide: Mr. Ravichandran Prof.A.K.Malhotra AGM (Finance) Faculty-Finance New Delhi BIMTECH 2 Summer Project Certificate This is to certify that Mr. Vineet Bhatia Roll No. 117/2006 a student of PGDM has worked on Summer project titled___ Risk Analysis of rebuilding
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