Financial Management Lecture

iFinancial management week 7 - lecture 6 in operation(p) Project Appraisal Assignement - Part A stockholder pry maximisation. - sh arowner measure out - adv and disadv. - pike and neal links to strategies apply the possible action unfavorable judgment it Part B have they delivered shareholder value all over the past 5 years - TSR total shareholder establish for every year - EVA frugal value added - need represent of equity (calculate using the dividend result model) Lecture A company-s goal to maximise shareholder value needs to choose the right take tos Advantages and disadv - PI cyberspaceability mogul discounting the bullion flows and addind them up then dividing by the initial investiture Is not too different from NPV. If the company is limitless we meet both projects if we need to choose we choose important because it has a higher PI. use the NPV in this case to vitiate qualification a wrong finish. PI is an easi er rule to use. If capital is circumscribe (not enough property to encounter the projects ) accept the project with the highest PI. In an efficient capital market, the money goes to the projects with high PI. yet the markets are not efficient. Its not the best decision to undertake all the good projects we can on that point powerfulness be limitations in the management or other restrictions.

If in that location is an internal constraint we should check the reasons, if its external there is secret code to be done just 2 projects chosen from 3. pinch up profit = net income Cash flow = shed light on profit + Depreciation AAR = ordinary Annual profit / Average investm ent Average investment = opening asset + l! oo asset / 2 If we relate to the equal of capital by chance we can assess the decision if its good though its not the best m value of money is one of the key things and also the detail that profit and cash are not the same. The payback rule and discounted payback method. -The straightaway you feature the investment, the less risky it is. The outrage is that ignores the...If you want to get a full essay, order it on our website: OrderEssay.net

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