CapitalBudgeting_201.. - CITT

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Capital Budgeting • Cash Flow examples: – The Examples of cash in-flows are new or additional sales and savings due to lower or eliminated product costs or expenses. – Examples of cash out-flows are additional purchases of materials, increased cost for labour or other overheads (indirect expenses), such as the incremental increase in: rent, utilities, taxes, and other similar expenses that require a cash disbursement, related to the project. • Some expenses do not require a cash out-flow and are not directly considered in the cash flow analysis. Examples of such expenses are any form of amortization (depreciation or depletion) of a capital asset. ©2012, Varmelous Ind. Inc. -- Slide 14
Capital Budgeting • Discounted Cash Flow example: • The cash flows in the example presented are somewhat simplified. Some of the elements of the cash flow analysis, such as tax shields, which are the result of depreciation for tax purposes, known as Capital Cost Allowance, (commonly abbreviated as CCA) will be provided without supporting detail. The Finance department of your company would usually provide such details. ©2012, Varmelous Ind. Inc. -- Slide 15
Page 1 and 2: Capital Budgeting Learning Outcomes
Page 3 and 4: The Concept of the Cost of Capital
Page 9 and 10: Difficulty and importance in findin
Page 11 and 12: Capital Budgeting • When evaluati
Page 13: Capital Budgeting • Cash Flows: -
Page 17 and 18: Discounted Cash Flow - Net Present
Page 39 and 40: Discounted Cash Flow - (IRR) IRR DC
Page 41: About the presenter • Michel has

CapitalBudgeting_201.. - CITT

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