Capital Budgeting Meaning – Capital budgeting (or investment appraisal) is the planning process used to determine whether an organization’s long term investments such as new machinery‚ replacement machinery‚ new plants‚ new products‚ and research development projects are worth the funding of cash through the firm’s capitalization structure (debt‚ equity or retained earnings). It is the process of allocating resources for major capital‚ or investment‚ expenditures. One of the primary goals of
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Paul Mozur‚ The Wall Street Journal‚ October 16‚ 2012 (also see version printed on October 17‚ 2012 "Foxconn Factory in China Used 14-Year-Old Workers") "Working Conditions: The Persistence of Problems in China ’s Factories" by Stanley Lubman‚ The Wall Street Journal‚ September 25‚ 2012 “Apple‚ Foxconn set new standard for Chinese workers” by Poorima Gupta and Edwin Chan Reuters‚ March 30‚ 2012 “China Population Balance Tilts Urban” by Jeremy Page and Bob Davis‚ The Wall Street Journal‚ January 18‚
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Subject: Financial Management Chapter no. 11: Capital Budgeting Chapter No. 11 – Capital Budgeting Contents ♦ Capital budgets as opposed to revenue budgets ♦ Different kinds of capital budgets – non-productive assets‚ improving operating efficiency and capital projects ♦ Choosing capital projects – Conventional and Discounted Cash Flow techniques ♦ Payback period‚ Discounted payback period‚ Net Present Value‚ Internal Rate of Return‚ Profitability Index methods ♦ Assumptions underlying different
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The Basics of Capital Budgeting Integrated Case Study Allied Components Company You recently went to work for Allied Components Company‚ a supplier of auto repair parts used in the after-market with products from Daimler‚ Chrysler‚ Ford‚ and other automakers. Your boss‚ the chief financial officer (CFO)‚ has just handed you the estimated cash flows for two proposed projects. Project L involves adding a new item to the firm’s ignition system line; it would take some time to build up the
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Capital Budgeting Luz A comas Strayer University Professor: Michael Hamuicka Financial Management – FIN 534 05/02/2011 Abstract Capital budgeting is one of the most important areas of financial management. There are several techniques commonly used to evaluate capital budgeting projects namely the payback period‚ accounting rate of return‚ present value and internal rate of return and profitability index. Recent studies highlight that financial managers worldwide favor
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CAPITAL BUDGETING MEANING OF CAPITAL BUDGETING Capital budgeting is the making of long term planning decision for investment fixed assets and their financing. Capital budgeting decision is concerned with current investment that will pay for itself and yield an acceptable rate of return over its life span. Hampton (1992) defines capital budgeting as the decision making process by which firms evaluate the purchase of major fixed assets‚ including buildings‚ equipment. It also covers decisions to
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WSJ/Fortune Essay 2 In a Wall Street Journal article titled “Greed is for Wimps”‚ the writer talks about how the new generation‚ Generation Y‚ is becoming more socially aware. According to the article‚ this new generation of professionals wants to give back to the community. Apparently it’s not enough to be successful and make all the money in the world. These young professionals are no longer satisfied with driving expensive cars and wearing name brand clothes. An interview with one such young
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Notes: FIN 303 Spring 09‚ Part 7 – Capital Budgeting Professor James P. Dow‚ Jr. Part 7. Capital Budgeting What is Capital Budgeting? Nancy Garcia and Digital Solutions Digital Solutions‚ a software development house‚ is considering a number of new projects‚ including a joint venture with another company. Digital Solutions would provide the software expertise to do the development‚ while the other company‚ American Financial Consultants (AFC) would be responsible for the marketing.
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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
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Wall Street Journal Article Review #2 Microsoft Abandons ‘Stack Ranking’ Employees Article by Authors‚ Shira Ovide and Rachel Feintzeig Abstract In the article “Microsoft Abandons ‘Stack Ranking’ Employees”. Shira Ovide and Rachel Feintzeig discuss how getting rid of such a system will benefit the company. The authors cite several sources. They don’t go into too deep of detail on why CEO Mr. Ballmer decided to implement the change‚ only that before he leaves the company for good he wanted
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