台湾大学财务廖咸兴-Project Analysis Training

Irwin/McGraw-HillChapter8FundamentalsofCorporateFinanceThirdEditionProjectAnalysisBrealeyMyersMarcusslidesbyMatthewWill8-2TopicsCoveredHowFirmsOrganizeTheirInvestmentProcessSome“WhatIf”QuestionsSensitivityAnalysisBreakEvenAnalysisFlexibilityinCapitalBudgetingDecisionTreesOptions8-3CapitalBudgetingProcessCapitalBudget-Thelistofplannedinvestmentprojects.TheDecisionProcess1-Developandrankallinvestmentprojects2-Authorizeprojectsbasedon:•Govtregulation•Productionefficiency•Capacityrequirements•NPV8-4CapitalBudgetingProcessCapitalBudgetingProblemsConsistentforecastsConflictofinterestForecastbiasSelectioncriteria(NPVandothers)8-5HowToHandleUncertaintySensitivityAnalysis-Analysisoftheeffectsofchangesinsales,costs,etc.onaproject.ScenarioAnalysis-Projectanalysisgivenaparticularcombinationofassumptions.SimulationAnalysis-Estimationoftheprobabilitiesofdifferentpossibleoutcomes.BreakEvenAnalysis-Analysisofthelevelofsales(orothervariable)atwhichthecompanybreakseven.8-6SensitivityAnalysisExampleGiventheexpectedcashflowforecastslistedonthenextslide,determinetheNPVoftheprojectgivenchangesinthecashflowcomponentsusingan8%costofcapital.Assumethatallvariablesremainconstant,excepttheoneyouarechanging.8-7SensitivityAnalysisYear0Years1-12Investment-5,400Sales16,000VariableCosts13,000FixedCosts2,000Depreciation450Pretaxprofit550.Taxes@40%220Profitaftertax330Operatingcashflow780NetCashFlow-5,400780Example-continuedNPV=$4788-8SensitivityAnalysisExample-continuedPossibleOutcomesRangeVariablePessimisticExpectedOptimisticInvestment(000s)6,2005,4005,000Sales(000s)14,00016,00018,000VarCost(%ofsales)83%81.25%80%FixedCosts(000s)2,1002,0001,9008-9SensitivityAnalysisExample-continuedNPVCalculationsforPessimisticInvestmentScenarioYear0Years1-12Investment-6,200Sales16,000VariableCosts13,000FixedCosts2,000Depreciation450Pretaxprofit550.Taxes@40%220Profitaftertax330Operatingcashflow780NetCashFlow-6,200780NPV=($121)8-10SensitivityAnalysisExample-continuedNPVPossibilitiesNPVsVariablePessimisticExpectedOptimisticInvestment()000(000s)-121478778Sales(000s)-1,2184782,174VarCost(%ofsales)-7884781,382FixedCosts(000s)264789308-11BreakEvenAnalysisExampleGiventheforecasteddataonthenextslide,determinethenumberofplanesthatthecompanymustproduceinordertobreakeven,onanNPVbasis.Thecompany’scostofcapitalis10%.8-12BreakEvenAnalysisYear0Years1-6Investment$900Sales15.5xPlanesSoldVar.Cost8.5xPlanesSoldFixedCosts175Depreciation900/6=150PretaxProfit(7xPlanesSold)-325Taxes(50%)(3.5xPlanesSold)-162.5NetProfit(3.5xPlanesSold)-162.5NetCashFlow-900(3.5xPlanesSold)-12.58-13BreakEvenAnalysisAnswerThebreakevenpoint,isthe#ofPlanesSoldthatgeneratesaNPV=$0.Thepresentvalueannuityfactorofa6yearcashflowat10%is4.355Thus,NPVxPlanesSo=-900+435535.(.ld-12.5)8-14AnswerSolvingfor“PlanesSold”0435535=-900+.(.ld-12.5)xPlanesSoPlanesSold=63BreakEvenAnalysis8-15OperatingLeverageOperatingLeverage-Thedegreetowhichcostsarefixed.DegreeofOperatingLeverage(DOL)-Percentagechangeinprofitsgivena1percentchangeinsales.DOL=%changeinprofits%changeinsales8-16OperatingLeverageExample-Acompanyhassalesoutcomesthatrangefrom$16milto$19mil,Dependingontheeconomy.Thesameconditionscanproduceprofitsintherangefrom$550,000to$1,112,000.WhatistheDOL?DOL==5.45102.218.758-17Flexibility&OptionsDecisionTrees-Diagramofsequentialdecisionsandpossibleoutcomes.DecisiontreeshelpcompaniesdeterminetheirOptionsbyshowingthevariouschoicesandoutcomes.TheOptiontoavoidalossorproduceextraprofithasvalue.TheabilitytocreateanOptionthushasvaluethatcanbeboughtorsold.8-18DecisionTreesNPV=0Don’ttestTest(Invest$200,000)SuccessFailurePursueprojectNPV=$2millionStopprojectNPV=0