ACCT 201 Lecture 4: CPA_23_Chapter_11_Part_B
Document Summary
Dr. ron a. rhoades (cid:494)da bear and a purveyor of great pre-(cid:887)99(cid:886)(cid:495)s music. Financial managers need to evaluate how cash is going to be used for various investments, or projects. In the prior cpa we reviewed the finer points of determining the amount of the cash flows. As you recall, in chapter 10 we reviewed how capital expenditures (capex) projects are evaluated by firms, using the (cid:498)payback period(cid:499) (cid:523)pbp(cid:524) method, the (cid:498)net present value(cid:499) (npv) method, and the. We now explore sections 11. 4, 11. 5, 11. 6 and 11. 7 of the textbook. Risk-adjusted discount rate (radr: also known as risk-adjusted required return. Readings and videos: please read sections 11. 4, 11. 5, 11. 6 and 11. 7. Terminal cash flow- cash flow resulting from termination and liquidation of project at end of life. After tax proceseds from sale of new asset = Proceeds from sale of asset = salvage value net any removal or clean-up costs. Recovery of any initial net working capital investment.
