财务管理培训课件.ppt

Irwin/McGraw-HillChapter 6Fundamentals of Corporate FinanceThird EditionNet Present Value and Other Investment CriteriaBrealey Myers Marcusslides by Matthew WillIrwin/McGraw-HillThe McGraw-Hill Companies, Inc.,2001第一页，共三十六页。 Topics CoveredNet Present ValueOther Investment CriteriaProject InteractionsCapital Rationing第二页，共三十六页。 Net Present ValueOpportunity Cost of Capital - Expected rate of return given up by investing in a project. Net Present Value - Present value of cash flows minus initial investments.第三页，共三十六页。 Net Present ValueExample Suppose we can invest $50 today and receive $60 in one year. What is our increase in value given a 10% expected return?This is the definition of NPVInitial InvestmentAdded Value$50$4.55第四页，共三十六页。 Net Present ValueNPV = PV - required investment第五页，共三十六页。 Net Present ValueTerminologyC = Cash Flowt = time period of the investmentr = “opportunity cost of capital”The Cash Flow could be positive or negative at any time period.第六页，共三十六页。 Net Present ValueNet Present Value Rule Managers increase shareholders’ wealth by accepting all projects that are worth more than they cost. Therefore, they should accept all projects with a positive net present value.第七页，共三十六页。 Net Present ValueExample You have the opportunity to purchase an office building. You have a tenant lined up that will generate $16,000 per year in cash flows for three years. At the end of three years you anticipate selling the building for $450,000. How much would you be willing to pay for the building?第八页，共三十六页。 Net Present Value0 1 2 3$16,000$16,000$16,000$450,000$466,000Present Value 14,953 14,953 380,395$409,323Example - continued第九页，共三十六页。 Net Present ValueExample - continued If the building is being offered for sale at a price of $350,000, would you buy the building and what is the added value generated by your purchase and management of the building?第十页，共三十六页。 Net Present ValueExample - continued If the bu