Chapter 12 Capital Budgeting and Estimating Cash flows 12-1
12-1 Chapter 12 Capital Budgeting and Estimating Cash Flows
Capital Budgeting and Estimating Cash Flows n The Capital Budgeting Process n Generating Investment Project Proposals o Estimating Project After-Tax Incremental Operating Cash Flows 12-2
12-2 Capital Budgeting and Estimating Cash Flows The Capital Budgeting Process Generating Investment Project Proposals Estimating Project After-Tax Incremental Operating Cash Flows
What is Capital The process of identifying analyzing, and selecting investment projects whose returns(cash flows)are expected to extend beyond one year. 12-3
12-3 What is Capital Budgeting? The process of identifying, analyzing, and selecting investment projects whose returns (cash flows) are expected to extend beyond one year
The Capital Budgeting Process n Generate investment proposals consistent with the firm's strategic objectives o Estimate after-tax incremental operating cash flows for the investment projects o Evaluate project incremental cash flows 12-4
12-4 The Capital Budgeting Process Generate investment proposals consistent with the firm’s strategic objectives. Estimate after-tax incremental operating cash flows for the investment projects. Evaluate project incremental cash flows
The Capital Budgeting Process n Select projects based on a value maximizing acceptance criterion n Reevaluate implemented investment projects continually and perform postaudit for completed projects 12-5
12-5 The Capital Budgeting Process Select projects based on a valuemaximizing acceptance criterion. Reevaluate implemented investment projects continually and perform postaudits for completed projects