34 capital budgeting steps capital 1 evaluate cash

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Unformatted text preview: Budgeting Steps Capital 1) Evaluate Cash Flows 1) Evaluate Look at all incremental cash flows Look incremental occurring as a result of the project. occurring Initial outlay Differential Cash Flows over the life of the project (also referred to as annual cash flows). annual Terminal Cash Flow Capital Budgeting Steps Capital 1) Evaluate Cash Flows 1) Evaluate 0 1 2 3 4 5 6 ... n Capital Budgeting Steps Capital 1) Evaluate Cash Flows 1) Evaluate Initial outlay 0 1 2 3 4 5 6 ... n Capital Budgeting Steps Capital 1) Evaluate Cash Flows 1) Evaluate Initial outlay 0 1 2 3 4 5 6 Annual Cash Flows ... n Capital Budgeting Steps Capital 1) Evaluate Cash Flows 1) Evaluate Terminal Cash flow Initial outlay 0 1 2 3 4 5 6 Annual Cash Flows ... n Capital Budgeting Steps 2) Evaluate the risk of the project. Evaluate We’ll get to this at the end of this chapter. For now, we’ll assume that the risk of the For project is the same as the risk of the project overall firm. overall If we do this, we can use the firm’s cost of...
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This note was uploaded on 01/17/2014 for the course GEB 3375 taught by Professor Sweo during the Winter '08 term at University of Central Florida.

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