tailieunhanh - Lecture Fundamental accounting principles (21e) - Chapter 25: Capital budgeting and managerial decisions

After completing this chapter you should be able to: Describe the importance of relevant costs for short-term decisions, evaluate short-term managerial decisions using relevant costs, analyze a capital investment project using break-even time, compute payback period and describe its use. | Capital Budgeting and Managerial Decisions Chapter 25 Chapter 25: Capital Budgeting and Managerial Decisions Capital budgeting: Analyzing alternative long-term investments and deciding which assets to acquire or sell. Outcome is uncertain. Large amounts of money are usually involved. Investment involves a long-term commitment. Decision may be difficult or impossible to reverse. Capital Budgeting Capital budgeting is the process of analyzing alternative long-term investments and deciding which assets to acquire or sell. These decisions can involve developing a new product or process, buying a new machine or a new building, or acquiring an entire company. An objective for these decisions is to earn a satisfactory return on investment. Capital budgeting decisions require careful analysis because they are usually the most difficult and risky decisions that managers make. Specifically, a capital budgeting decision is risky because (1) the outcome is uncertain, (2) large amounts of money are usually involved, (3) the investment involves a long-term commitment, and (4) the decision could be difficult or impossible to reverse, no matter how poor it turns out to be. Risk is especially high for investments in technology due to innovations and uncertainty. Capital budgeting decisions often involve plant expansion issues, equipment selection, and equipment replacement. Payback Period The payback period of an investment is the time expected to recover the initial investment amount. Managers prefer investing in projects with shorter payback periods. P 1 The payback period is the length of time it takes a project to recover its initial cost. When the annual net cash inflows are equal in each year, we can calculate the payback period by dividing the investment required by the net annual cash inflows. All other things equal, a shorter payback period is better than a longer payback period. Payback period = Cost of Investment Annual Net Cash Flow Payback period = $16,000 $4,100 = . | Capital Budgeting and Managerial Decisions Chapter 25 Chapter 25: Capital Budgeting and Managerial Decisions Capital budgeting: Analyzing alternative long-term investments and deciding which assets to acquire or sell. Outcome is uncertain. Large amounts of money are usually involved. Investment involves a long-term commitment. Decision may be difficult or impossible to reverse. Capital Budgeting Capital budgeting is the process of analyzing alternative long-term investments and deciding which assets to acquire or sell. These decisions can involve developing a new product or process, buying a new machine or a new building, or acquiring an entire company. An objective for these decisions is to earn a satisfactory return on investment. Capital budgeting decisions require careful analysis because they are usually the most difficult and risky decisions that managers make. Specifically, a capital budgeting decision is risky because (1) the outcome is uncertain, (2) large amounts of money .

• Kế toán - Kiểm toán
• Capital budgeting
• Managerial decisions
• Managerial decision scenarios
• Accounting principles
• Fundamental accounting principles
• Lecture Fundamental accounting principles
• Index Technique
• Value Technique
• Project Risk
• Return Technique
• Practice pamela
• Cash flow estimation
• Integrative examples
• Discounted payback period techniques
• Profitability index technique
• Comparing evaluation techniques
• Measurement of project risk
• The capital budgeting decision
• Valuing a lease
• The lease valuation model
• Managerial accounting
• Lecture Managerial accounting
• Process costing
• Standard costing systems
• Capital budgeting decisions
• Global finance
• Global financial management
• Lecture Global financial management
• Global valuation
• Capital budgeting formulas
• Managerial finance
• Principles of managerial finance
• Capital budgeting techniques
• Capital budgeting cash flows
• Payout policy
• Lecture Engineering economy
• Engineering economy
• Bài giảng Kinh tế kỹ thuật
• The capital budgeting process
• Capital financing
• Capital allocation
• Debt capital
• Financial Appraisal
• project costs
• project investment
• project evaluation
• project management
• technical project management
• project management for small business
• Principles of corporate finance
• Corporate finance
• Capital structure
• Dividend policy
• The cost of capital
• Lecture Managerial economics
• Managerial economics
• Optimal capital budget
• Cost of capital
• Capital budgeting decision rules
• Lecture Managerial finance
• Financial statements
• Basics of capital budgeting
• Evaluating cash flows
• Strategic financial management
• Financial management
• Capital budgeting under conditions
• Domestic capital budgeting
• Free cash flows
• Current liabilities management
• Foundations of finance
• Determining the financing mix
• Internal financing
• Working capital management
• Capital markets
• Preferred stock financing
• Multinational financial management
• Quản lý tài chính
• Quản lý tài chính đa quốc gia
• Multinational finance
• Fundamentals of corporate finance
• Capital management
• Financing decisions
• Fundamentals of capital budgeting
• Financial statement
• Profitability analysis
• Cash flows
• The Basics of Capital Budgeting Evaluating Cash Flows
• Profitability Index
• Unequal lives
• Economic life
• Method of discounted payback
• Method of payback