18/03/2013 2F2Y BUSINESS FINANCE Lecture 20: Revision & Exams Dr George Daskalakis Lecturer in Finance Topics covered • What have you learned? • Exams description 2 Syllabus Module textbook: Brealey / Myers / Marcus Fundamentals of Corporate Finance 7th Edition‚ McGraw-Hill Chapters covered: 1‚ 2‚ 4‚ 5‚ 6‚ 7‚ 8‚ 11‚ 12‚ 13‚ 14‚ 15‚ 16‚ 17‚ 21‚ 23‚ 24 (Sections 1-3) Chapters NOT covered: 3‚ 9‚ 10‚ 18‚ 19‚ 20‚ 22‚ 25 NB: Basic understanding of accounting principles is assumed (Chapter
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than the project’s life means that the NPV is positive for a zero discount rate‚ but nothing more definitive can be said. For discount rates greater than zero‚ the payback period will still be less than the project’s life‚ but the NPV may be positive‚ zero‚ or negative‚ depending on whether the discount rate is less than‚ equal to‚ or greater than the IRR. The discounted payback includes the effect of the relevant discount rate. If a project’s discounted payback period is less than the project’s life
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confidence‚ but also allow us to be more professional and efficient with our work. Training lessons such as “analyze a company’s financial health by describing the relationship between return on equity (ROE)‚ return on assets (ROA)‚ net income percent and financial leverage; calculate the NPV‚ internal rate of return (IRR) and benefit/ cost ratio of major capital investment…” (Hynes‚ 2006‚ p. 39) can let us get a general idea of the
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Euroland Foods S. A. Case Report Prepared by Lisa Simth October 18‚ 2010 Euroland Foods S.A. Case Analysis I. Introduction Euroland Foods Company was a publicly traded company since 1979. Theo Verdin founded the company in 1924 as a result in developing his dairy business. Euroland Foods Company saw itself as a multinational producer. The four products were high-quality ice cream‚ yogurt‚ bottled water‚ and fruit juices. Each product accounted for 60%‚ 20%‚ 10%‚ and 10% of the company’s
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Financial Management Subject Number 18 Study Pack Strathmore University Distance Learning Centre P.O. Box 59857‚ 00200‚ Nairobi‚ Kenya. Tel: +254 (02) 606155 Fax: +254 (02) 607498 Email dlc@strathmore.edu Copyright ALL RIGHTS RESERVED. No part of this publication may be reproduced‚ stored in a retrieval system or transmitted in any form or by any means‚ electronic‚ mechanical
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(NPV) is performed on the salvage values before and after sales tax values along with the different sale ranges. Keywords: NPV‚ NPV Profile‚ NPV‚ IRR‚ multiple IRRs‚ ranking conflict of NPV vs. IRR‚ payback period‚ profitability index‚ discount rate‚ cost of capital concept‚ cash flow analysis‚ cash flow timeline‚ conventional cash flow stream‚ non-conventional cash flow stream‚ sunk cost‚ opportunity cost‚ independent projects‚ mutually exclusive projects Overview of the Capital
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board of directors would need to weigh those considerations before granting final approval to proceed with the project. The task for students is to evaluate the 7E7 project against a financial standard‚ the investors’ required returns. The case gives internal rates of return (IRR) for the 7E7 project under base-case and alternative forecasts. The students must estimate a weighted-average cost of capital (WACC) for Boeing’s commercial-aircraft business segment in order to evaluate the IRRs. As a result
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Caledonia Products Integrative Problem FIN370 Thomas Rindahl April 1st‚ 2013 1. Why should Caledonia focus on project free cash flows as opposed to the accounting profits earned by the project when analyzing whether to undertake the project? Caledonia should observe the free cash flows on the project instead of the accounting profits because free cash flows help show how well the project can pay back its initial investment. Of course it will also show the projected profit
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over the past five years SUMMARY • • • • The Merseyside project would be in the engineeringefficiency category : Impact on earning per share = had to be positive. Payback = maximum six years. Discounted cash flow = had to be positive. Internal rate of return had to be greater than 10%.
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earned through operational activities or cost cutting measures but that they add value to the company. Two approaches to making capital budgeting decisions use discounted cash flows. “One is the net present value method and the other is the internal rate of return
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