of the total revenue‚ EBITDA‚ EBIT and the Unlevered Net Income. Furthermore‚ the depreciation and Amortization‚ Capital Expenditures and the assumptions projected in Exhibit one case to make the adjustments in working Capital. These will all facilitate calculation of the Unleveraged Cash Flow (UFCF) from 2012 which stable increases. Consider the computations referencing income statement on separate sheet. TERMINAL VALUE Furthermore terminal value as a key valuation factor which can be calculated in
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Chapter 6 Capital investment:regardless of whether they involve a tangible or intangiable asset. The incestment creates wealth if the discounted value of the future cash flow exceeds the up front cost. The problem is what to discount- stick to these rules: 1. Only cash flow is relevant. Net present value depends on future cash flows it’s the difference between cash received and cash paid out. Cash should be recorded only when they occur and not when work is undertaken or a liability is incurred
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Estimate project values using Net Present Value (NPV) • Conduct sensitivity analysis for the forecast inputs Setting • January 2001 • Customer offering attractive terms on 3-year lease for a capesize carrier • Would require purchase of new carrier since existing fleet does not fulfill customer needs • Should it be purchased? Industry Dynamics • Revenue Drivers • Outlook in the: – Short run – Next couple of years – Long run Project Evaluation • Net Present Value
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Which of the following statements about finance‚ accounting‚ and financial management is most correct? 1 The primary role of finance is to plan for‚ acquire‚ and use resources to maximize the efficiency and value of the enterprise. Which of the following is not a finance activity? 2 Facilities management Which of the following statements about regulatory and legal issues in the health services industry is not correct? For the instructor‚ this was question 10. The costs to a health services
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costs to Riverbend? 1) Should Riverbend buy or lease the truck? In order to do a fair comparison of number‚ we need to calculate the present value of an annuity for leasing the vehicle. With an assumed discount rate of 10%‚ over the course of 5 years‚ we calculated a present value of $27‚293. 76. So if we were to look at price alone‚ the present value for leasing a vehicle for 5 years at $7‚200 a year would be $27‚293.76 which is $2‚993.76 more than if the company would purchase
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FIN 534 Midterm Exam 1 1. Of the following investments‚ which would have the lowest present value? Assume that the effective annual rate for all investments is the same and is greater than zero. 2. You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of the following would increase the calculated value of the investment? 3. Which of the following statements regarding a 20-year monthly payment amortized mortgage with
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management (modifying the firm’s credit collection policy with its customers). 2. Evaluate the following statement: Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profits. Presumably‚ the current stock value reflects the risk‚ timing‚ and magnitude of all future cash flows‚ both short-term and long-term. If this is correct‚ then the statement is false. 3. Why might the
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are government interference of tax control and face a largely Muslim population in Malaysia and the government has used the alcoholic drinks industry as a source of revenue generation. 2. Financial analysis No 1 2 Financial analysis 3 4 Quick assets ratio Average collection period Inventory turnover Gross profit margin
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most capital projects involve numerous variables and possible outcomes. For instance‚ estimating cash flows associated with a project involves working capital requirements‚ project risk‚ tax considerations‚ expected rates of inflation‚ and disposal values. It is necessary to understand existing markets to forecast project revenues‚ assess competitive impacts of the project‚ and determine the life cycle of the project. Investment Appraisal is therefore more than the identification and evaluation of
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Mountain Solutions. The sources of finance available for Miss Begun and her new establish business “Blue Mountain Solutions” are: 1. Loan from bank 2. Government Grants 3. Share capital issued 4. Bank Overdraft 5. Finance leasing 6. Sell of assets P2 1.2 Assess the implications of different sources finance (e.g. - equity financing and debt financing) for Blue Mountain Solutions including their relative advantages and disadvantages. [Guidance - example
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