they did not take into consideration that as a global company with operations in countries that are hugely different from the U.S they needed a more sophisticated way to think about risk and the cost of capital around the world. besides‚‚ with AES’s international expansions‚ the model of capital budgeting was not supposed to be exported to projects overseas‚ since the same model became increasingly strained with the expansions in brazil and Argentina because hedging key exposures such as regulatory
Premium Currency United States dollar Exchange rate
Capital Budgeting Part I PV= FV / (1+i)^y PV= present value‚ FV= future value‚ i= discount rate‚ and y= time. 1a) If the discount rate is 0%‚ what is the projects net present value? Year Cash Flow Discount Rate Discounted Cash Flow 0 -$400‚000 0% -$400‚000 1 $100‚000 0% $100‚000 2 $120‚000 0% $120‚000 3 $850‚000 0% $850‚000 Answer: The projects net present value is $670‚000 If the discount rate is 2%‚ what is the
Premium Net present value Internal rate of return Rate of return
Cases and Exercises for Value and Capital Budgeting Corporate Finance Academic Year 2012/2013 1. The treasurer of Amaro Canned Fruits has projected the cash flows of projects A‚ B and C as follows (measured in e): Year 0 Project A Project B Project C Year 1 70‚ 000 130‚ 000 75‚ 000 Year 2 70‚ 000 130‚ 000 60‚ 000 −100‚ 000 −200‚ 000 −100‚ 000 Suppose the relevant discount rate is 12% per annum. (a) Compute the profitability index for each of the three projects. (b) Compute the NPV for each
Premium Investment Net present value Price
Swedish corporations unaffected. The effects for the Swedish corporations have been tougher credit terms‚ with banks enforcing debt covenants such as demands of a higher share of own capital. Strategies which can be adapted within the firm to improve liquidity and cash flows concern the management of working capital and cash management‚ areas which are usually neglected in times of favourable business conditions. In this study it is examined how companies have adjusted their liquidity strategies
Premium Working capital Inventory Balance sheet
A STUDY ON WORKING CAPITAL MANAGEMENT IN TIRUMALA MILK PRODUCTS PVT.LTD A Project report submitted to the Department of Commerce and Business Administration‚ JNTU‚ KAKINADA. In partial fulfillment for the award of degree of MASTER OF BUSINESS ADMINISTRATION By CH.SESHAGIRI (Regd.No: 12JK1E0014) Under the guidance of Mr.Sk.Irshad (HOD)M.B.A.‚ M.com.‚( Ph.D.‚) GUNTUR ENGINEERING COLLEGE‚YANAMADALA(Affiliated to JNTU KAKINADA
Premium Management Business school Master's degree
Capital Budgeting Read Chaptes 7‚8 & 9 Problems from Chapter 7 : 1 to 28 Chapter 8 : 1 to 23 Chapter 9 : 1 to 24 1. NET PRESENT VALUE A. The Basic Idea Net present value—the difference between the market value of an investment and its cost. While estimating cost is usually straightforward‚ finding the market value of assets can be tricky. The principle is to find the market price of comparables or substitutes. Perspectives: Using the text example (page 257)‚ the basic idea
Premium Net present value Costs Variable cost
Jay Yang Mrs. Hill English 10 Honors-Period 7 5 October 2012 “There Will Come Soft Rains” Analysis Although technology seems to have replaced man in the opening pages of “There Will Come Soft Rains‚” in the end‚ Ray Bradbury shows that technology without man is doomed. In the beginning of the story‚ technology has rendered man totally unnecessary in the day-to-day running of a house. For example‚ the quote: “Tick-tock‚ seven o’clock‚ time to get up…”(Pg. 87)‚ shows that the house automatically
Premium Water Time Clock
Ray Bradbury‚ writer of the “There Will Come Soft Rains”‚ discusses a story of a family owning a futuristic home that reminds them of their daily events and is specifically scheduled to perform chores chronologically throughout the day. In the short story‚ Bradbury’s use of simile provides the readers with a projection of the overall tone of the narrative. To begin‚ a quite striking simile is used‚ “The fire backed off‚ as even an elephant must at the sight of a dead snake (bradbury 3)”. By comparing
Premium Good and evil Fiction Gothic fiction
future‚ Earth as we know it will be taken over by comprehending technology and will become a staple of everyday life where humans will intermix with machines. Technology will be the future’s new version of society. In the short story “There Will Come Soft Rains” by Ray Bradbury‚ in the year of 2026‚ technology had taken over the world when one house remained standing after a nuclear attack in Allendale‚ California. The owners of the house have disappeared due to nuclear blast which left nothing left
Premium Science fiction Science Ray Bradbury
Capital Purchase Justification Introduction According to the hospital’s five-year plan‚ an investment in capital equipment should boost the quality of services offered at the hospital. Many options of capital investments that hospital could invest in exist. However‚ this report recommends an investment in the MRI (Magnetic Resonance Imaging) equipment. This equipment involves a large capital investment upfront‚ but it can be profitable in the end. The hospital has considered factors such as the cost
Premium Magnetic resonance imaging Investment Rate of return