Corporate Finance #11 Capital Budgeting

Explore cash flow calculation by starting with earnings before depreciation and taxes, adjust for depreciation and taxes, and determine present-value cash flow for long-term capital investments.

Analyze how depreciation affects cash flow through taxes in capital budgeting, comparing no depreciation and one million depreciation to reveal the tax impact and its effect on future cash flows.

Analyze how tax rate changes affect cash flow in capital budgeting by separating depreciation's non-cash expense from cash outcomes, illustrating tax shields and present value implications for multi-year projects.

Explore payback period for two projects with a 220k investment and four-year cash flows, revealing 3.71 years for A and 3.63 for B, noting time value of money is ignored.

Compare two projects using the payback period and its limitations, then note that time value of money is considered in net present value and internal rate of return.

Explore the payback period and its time value of money limitations, using a lump-sum investment and multi-year cash flows, and compare with net present value and IRR.

Compare net present value and payback period to evaluate capital investments; NPVs use the present value of money with a 12 percent discount rate, unlike payback period.

Compute the internal rate of return for an upfront investment and a series of cash inflows. Compare it to net present value and payback, using Excel tools.

Explore how to evaluate projects using IRR and NPV by modeling cash flows, initial investment, and time value of money, and apply Excel to compute IRR against the hurdle rate.

Compute internal rate of return with uneven future cash inflows, relate IRR to net present value, and explore using Excel tools like goal seek and IRR formula.

Compute net present value with negative future outflows to assess projects against a 14 percent cost of capital, using Excel for present value calculations.

Explore net present value calculations with closing costs, accounting for the time value of money, using year-by-year cash flows and a 12% cost of capital in Excel.

Compute the net present value of a delayed-payment project using time value, with a 200,000 initial outlay, 9 percent cost of capital, and cash inflows starting in year five.

Compare net present value and internal rate of return for an 80,000 investment at a 12% hurdle rate, using cash flows of 45,000, 137,000, and 25,000.

Learn how net present value and internal rate of return compare for a 120,000 investment across five-year cash flows, with a 9 percent hurdle rate and a 22 percent IRR.

Compare two long-term projects using net present value, profitability index, and internal rate of return under a 10% hurdle rate to guide selection.

Explore capital budgeting with reinvestment rate assumptions, comparing NPV and IRR while analyzing reinvestment at the cost of capital to evaluate long-term projects.

Learn to compute the modified internal rate of return (MIRR) by reinvesting inflows at the cost of capital and solving for the rate that matches initial investment to future inflows.

Explore net present value under changing discount rates, evaluating an initial 100,000 investment with three-year cash flows at 10%, 15%, and 20% to compare returns and internal rate of return.

Learn how MACRS depreciation affects cash flow and taxes, apply the double declining balance with half-year convention, and compute NPV under a 14% hurdle rate.

Analyze a five-year macrs depreciation scenario to examine tax effects along with cash flows and net present value at an 11% cost of capital.

Analyze seven-year MACRS depreciation, a 10-year cash flow, and net present value. Explain how tax depreciation affects cash flows, taxes, and IRR decisions.

Analyze an initial investment in land and five-year MACRS depreciation, cash flows, and tax impact. Assess net present value and IRR at a 12% cost of capital.

Analyze the tax impact of selling depreciated assets under MACRS five-year property, including double declining balance, half-year convention, and straight-line comparisons.

Compute cash flows for long-term capital budgeting using depreciation and taxes in an Excel worksheet, converting accrual depreciation to cash flow to evaluate investment decisions.

Analyze how depreciation affects cash flow and taxes in capital budgeting, illustrating the tax impact and the non-cash nature of depreciation on long-term decisions.

Explore how a tax-rate change from 40% to 25% affects cash flow through depreciation, using an Excel exercise to compare earnings before taxes and depreciation, taxes, and cash flow.

Explain how to compute payback period in Excel for two projects, A and B, with 220,000, showing payback 3.71 vs 3.63 years and noting it ignores time value of money.

Compare projects of different lengths using the payback period in excel, show a running balance method, and note time value of money limitations, guiding toward present value calculations.

Explore the payback period and its time value of money limitations using an Excel practice problem that compares two four-year projects, highlighting how identical payback can mask value differences.

Compare net present value and payback period in a capital budgeting Excel practice, highlighting time value of money and cash flows to pick the better project.

Learn to compute the internal rate of return (IRR) in Excel by comparing cash flows to the initial investment, using NPV, goal seek, and the IRR function.

Learn to compute internal rate of return and net present value in Excel using goal seek and the IRR function to compare projects against the hurdle rate.

Use Excel to compute the internal rate of return for uneven cash inflows, verify with net present value, and compare against a 10 percent hurdle rate.

Analyze an Excel npv scenario with a negative future outflow, applying time value of money and a 14 percent cost of capital to decide if the project adds value.

Learn to compute net present value with closing costs in an Excel worksheet, using a 12% hurdle rate to evaluate a project's initial outlay, inflows, closing costs, and IRR.

Compute net present value for a capital budgeting project with delayed payments in Excel, applying a nine percent cost of capital and discounting cash flows across ten years.

Evaluate net present value and internal rate of return for a three-year project in Excel, with an 80,000 initial investment and cash inflows of 45k, 37k, and 25k.

Learn to compare net present value and internal rate of return using Excel, evaluating an initial investment and yearly cash flows at a discount rate.

compare two projects using profitability index alongside net present value and internal rate of return, applying a 10 percent discount rate to evaluate initial investments and cash flows.

Explore capital budgeting with excel on a five-year project, applying reinvestment rate assumptions and comparing reinvested inflows at the cost of capital versus the internal rate of return, using npv.

Walks through an Excel MIRR calculation for a 100,000 investment with 50,000, 34,000, and 39,000 inflows, assuming reinvestment at 15 percent cost of capital.

Compute net present value in Excel under changing discount rates, using absolute cell references and scenario analysis to compare projects against the hurdle rate.

Explore a capital budgeting problem in Excel using MACRS depreciation to compute cash flows and net present value at 14 percent, showing tax effects and depreciation methods.

Calculate after-tax cash flows using macrs depreciation for a 3-year asset with a 35% tax rate to evaluate npv and irr at a 9% cost of capital.

Apply six-year macrs depreciation in Excel cash flow model to determine taxes, after-tax cash flows, NPV, and IRR for a $700,000 asset at 30% tax and 11% cost of capital.

Apply seven-year MACRS depreciation and tax effects in an Excel model to analyze 10-year cash flows, NPV, and IRR with a 15% cost of capital.

Explore capital budgeting with land and MACRS five-year depreciation, analyze cash flows, and compute net present value and internal rate of return using an Excel practice problem.

Explore how depreciation and taxes affect cash flows in capital budgeting by modeling a five-year asset's sale after three years, including gain or loss and tax impact.

Apply five-year MACRS depreciation, calculate WACC, and project cash flow to determine net present value and IRR in an Excel-driven corporate finance problem.

Analyze a capital budgeting decision in Excel. Compare keeping the old asset versus buying a new one, considering incremental cash flows, depreciation, taxes, and NPV/IRR.