edition CHAPTER 2 CASH FLOWS AT WARF COMPUTERS The operating cash flow for the company is: (NOTE: All numbers are in thousands of dollars) OCF = EBIT + Depreciation – Current taxes OCF = $1‚332 + 159 – 386 OCF = $1‚105 To calculate the cash flow from assets‚ we need to find the capital spending and change in net working capital. The capital spending for the year was: | |Capital spending | | | |Ending net fixed assets
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Contents Abstract 1 Key words: merger HP Compaq synergy 1 1.Introduction of the case 1 1.1 The Hewlett-Packard Company 1 1.2 The Compaq Company 2 1.3 Motives 2 1.3.1 Strategic motives 2 1.3.2 Financial motives 3 Operating Synergy (mainly from cost savings) 3 Contribution Margin 3 2.HP’s Concerns 4 2.1 Business portfolio 4 2.2 Strategic problems 4 2.3 Financial impacts 4 2.4 Integration risk 5 3.Analysis and solutions 5 3.1 Stand-alone valuation 5 3.2 Synergy valuation 6 3.3 Premium
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INTRODUCTION TO CAPITAL BUDGETING Overview 159 7.1 The NPV Rule for Judging Investments and Projects 159 7.2 The IRR Rule for Judging Investments 161 7.3 NPV or IRR‚ Which to Use? 162 7.4 The “Yes–No” Criterion: When Do IRR and NPV Give the Same Answer? 163 7.5 Do NPV and IRR Produce the Same Project Rankings? 164 7.6 Capital Budgeting Principle: Ignore Sunk Costs and Consider Only Marginal Cash Flows 168 7.7 Capital Budgeting Principle: Don’t Forget the Effects of Taxes—Sally and Dave’s
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determines the economic feasibility of “Voodoo Love” based on the net present value (NPV) of its cash flows and the internal rate of return (IRR) over the 5 year period. We have made certain assumptions to calculate the final numbers which are outlined below. The “Appendix” contains the detailed calculations. Based on our calculations the project is economically feasible. The NPV of the project is $130‚961. A positive NPV implies that the present values of the cash outflows outweigh the present values
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6. Break even where total costs are covered by total revenue. B Determine Variable Costs/unit B Determine Variable Costs/unit C Calculate Contribution Margin (A – B) C Calculate Contribution Margin (A – B) E Calculate Break Even (Fixed Costs + Desired Operating Income / CM/unit) E Calculate Break Even (Fixed Costs + Desired Operating Income / CM/unit) D Determine Fixed Costs D Determine Fixed Costs Cvp Tools – Contribution Margin Analysis
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TEST 2 MGF 301 Corporation Finance Fall 2013 Please sign name in box (Note: Total Points = 100; Multiple Choice = 4 points each unless otherwise indicated) 1. YT Inc. is considering implementing a new project. Which of the following is a cash flow that should be taken into account for capital budgeting purposes? (a) Expected lost sales in a related YT Inc. product caused by the new product (b) The annual bonus paid to the YT Inc. President based on last year’s earnings
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COVENANT UNIVERSITY‚ OTA COLLEGE OF DEVELOPMENT STUDIES DEPARTMENT OF FINANCE ALPHA SEMESTER 2013/2014 ACADEMIC SESSION LECTURE NOTE: BFN 411- FINANCIAL MANAGEMENT WEEK 2 - 3 TOPIC - CAPITAL INVESTMENT ANALYSIS AND INFLATION AND CAPITAL INVESTMENT ANALYSIS WITH TAXATION OBJECTIVE At the end of this lecture‚ the students should be able to: 1. Explain the nature of inflation 2. Distinguish between money cash flow and real cash flow 3. Distinguish between money
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all-equity firm‚ the appropriate discount rate is the firm’s unlevered cost of equity‚ so the NPV of the purchase is: NPV = –$100‚000‚000 + ($15‚000‚000 / .125) NPV = $20‚000‚000 b. After the announcement‚ the value of Stephenson will increase by $20 million‚ the net present value of the purchase. Under the efficient-market hypothesis‚ the market value of the firm’s equity will immediately rise to reflect the NPV of the project. Therefore‚ the market value of Stephenson’s equity after the announcement
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El Laberinto del Fauno Obedience is a recurrent theme in El Laberinto del Fauno‚ discuss at least two examples and what they represent. In El Laberinto del Fauno‚ Guillermo del Toro uses the theme of obedience to illustrate and condemn two repressive components of fascism: patriarchy and the coercion of free will. This essay will look at two examples of obedience in the film which reveal the abhorrent nature of these aspects of fascism and the importance of resisting them. These are‚ respectively
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11.04.2010 Chapter 10. Mini Case Situation You have just graduated from the MBA program of a large university‚ and one of your favorite courses was "Today ’s Entrepreneurs." In fact‚ you enjoyed it so much you have decided you want to "be your own boss." While you were in the master ’s program‚ your grandfather died and left you $1 million to do with as you please. You are not an inventor‚ and you do not have a trade skill that you can market; however
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