財務成本管理英語

INVESTMENTAPPRAISAL

［對應中文教材2008年財務成本管理第五章:投資管理］

A.ROCE（已動用資本回報率）orARR（會計收益率）（AccountingRateofReturn）

、公手寫板圖示O3OLO2

匕。CE二

2乩M。貝

B.Payback（回收期法）

Paybackperiod

=Initialpayment/Annualcashinflow,paybackisnotalwaysanexactnumber3fyears

Mostcommonformula:

ROCE=EBIT（afterdepreciation）/initialcapitalcosts

、公手寫板圖示0301-04

CNPV（凈現值法）

(1)Basicassumptions:

,cashoutlayoccursinyear0(now).

,cashflowsoccurattheendoftheyear.

,ifacashflowoccursatthebeginningofayear,itisassumedtooccurattheend

ofthepreviousyear.

DIRR（內含報酬率法）

、公手寫板圖示O3OLO7'

(1)Basicprinciple:IRRisthecostofcapitalatvhichtheNPViszero,iftheexpected

IRRishigherthanatargetrateofreturn;theprojectisfinanciallyworthundertaking.

>____________

、公手寫板圖示0301-08

NPV

(2)SclcctionbetweenIRRandNPV:whenachoicehas:obemadebetweenmutuallyexclusive

projects,insuchcasetheNPVshouldbeselected,becausehigherNPVcanmaximize

shareholder,swealth.

、公手寫板圖示030L09

松5

Definition

Thediscountratwhich,whenapp1iedtothecashf1owsofaproject,givesanNPVof

zero.

Or

Thebreak-eveninterestrateforaproject.

Annuityfactor

Initialinvestment

attheIRR=(Equal)AnnualInflow

forthe1ifeoftheproject

Unevencashflows

Thosehavetobofoundbytrialanderrororbyestimatingusingtwopresentvalues.

IRR=A+—^-—

%-為

Where:A=lowerratechcsen"。=NPVatrateA

B二higherrate"二NPVatrateB

IthelpstogetAandBasclosetothetrueIRRaspossible,butitdoosn,tmatter

whether

theresultantNPVsarepositive,negativeoroneofeach.

Somestudentsprefertouseacommonsenseapproachratherthanaformula.Seeingby

now

MuchNPVhasfallen(fromatoQ)asthediscountratehasrisenfromAtoB,

TheyfindhowmuchmorethediscountrateneedstorisetobringtheNPVtozero.

Whethertheformulaisusedorcommonsense,thecalculationassumesalinear

relationship

BetweenNPVanddiscountrate.Infacttherelationshipisnotlinear,hencethe

calculation

Isonlyapproximateand(unlessyouhavebeenluckywhenguessingwhichdiscountrates

to

use)youshouldnotquoteIRR'scalculatedinthiswaytomany,nottoany,decimal

places-

unlesstheexaminerasksyou.

IRRofaperpetuity

Thepresentvalueofaperpetuityistheannualcashflowdividedbythediscountrate

(expressedasadecirraI.Fromthisitfollowsthat:

Annualcashflows

theIRRofaperpetuity二initialinvestment=100

Perpetuity:永續年金

Methodofpresentation

AsimplecalculationsuchasthoseforWoodscanbedoneonasingleline.Forlarger

projects

twopossibilitiesexist:

(i)thecashbudgetapproach

(ii)thetabularapproach.

(1)Cashbudgetapprcach

Time0123

￡*000￡,000￡'000￡'000

Investment(X)X

Advertising(X)(X)

Workingcapital(X)X

Materials(X)(X)(X)

Labour一(X)(X)(X)

Overheads—(X)(X)(X)

Revenue一一X

——

Netcashflow(X)(X)(X)X

y%Discountfactor1XXX

Presentvalue(X)(X)(X)X

Netpresentvalue(￡'000)X

Thecashbudgetapproachissuitableforshortprojectswithlotsofdifferentcash

flows

Whichchangefromyeartoyear.

(2)Tabularapproach

TimeCashflowy%DiscountPresentva1ue

￡'000￡'000￡,000

0Investment(X)1(X)

0and1Advertising(X)X(X)

0Workingcapital(X)1(X)

0-9Materials(X)1(X)

1-10Labourandoverheads(X)X(X)

1-10RevenueXXX

10SalesproceedsXXX

10WCrecoveryXXX

Netpresentvalue(￡'000)X

Thetabularapproachissuitableforlongprojectswithlotsofdifferentcashflows

thatare

Thesamefromyeartoyear(enablingannuityfactorstobeused).

Pickingtherightfigures

Whencarryingoutdiscountedcashflowanalysisitisimportanttoselecttheright

figures.

Ignore:

1.Sunkcosts-<imountsthathavealreadybeenspent

2.Depreciation-notacashflow

3.Bookvalues-notacashflow

4.Non-incrementalfixedcosts(lookoutforthewordswreapportionedfixed

overheadsM)

5.Interestcosts-takenintoaccountbythediscountingprocess

Include:

Thosecashflowsthatarespecificallyreceivedorincurredas<xresultoftheacceptance

oftheproject(future-incremental-cashflows).

Assetreplacementdecision

Factorstobeconsideredwhenrnakingreplacementdecisionareasfo11ows:

,capitalcostofnewequipment;

,operatingcosts,increasedrepairandmaintenancecosts;

lossofproductivity;

lowerofqualityandquantityofoutput;

」公手寫板圖示0301T2

SCMyO版/叱

幾（/以Lc

Oneapplicationofdiscountedcashflowistomakedecisionsconcernedwiththe

replacementof

Machinery.Thisappliestoshort1ifeassetsthatwillneedtobereplacedin

perpetuity(e.g.motor

Carsorphotocopier