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Accounting - (inflows net of tax – outflows net of tax...

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Capital Budgeting 1. Determine the Weighted Average Cost of Capital 2. Pick asset to possibly buy. 3. Determine total cost of asset. 4. Determine future cash inflows from using the asset. 5. Determine future cash outflows from using the asset. 6. Make the future cash inflows and outflows net of tax. 7. Calculate the depreciation tax shield. 8. Find the net cash inflows 
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Unformatted text preview: (inflows net of tax – outflows net of tax + tax shield) 9. Use the Cost of Capital to find the PV of the future net cash inflows. 10. Subtract the cost of the equipment from the PV of the future cash flows. 11. This is Net Present Value. 12. If Positive maybe accept project. 13. Determine if there are any qualitative factors to consider....
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