FNCE 2P91 Chapter Notes - Chapter 10: Corporate Finance, Capital Cost Allowance, Tax Shield
28 Apr 2013
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Average have been seen as low 50s: will be boosting marks about 10-15% What happens if there is a strike: unless you hear something back before next tuesday class will still be going on. Process by which firms allocate (budget) or commit funds (capital) to investment s to generate at least 1 year into the future: contrast to working capital management that typically deals with short term (<1 year) assets. The capital budgeting process: generate ideas, analysis of proposals, forecast cash flows and evaluate project profitability, planning the capital budget, strategic fit, timing, monitor and post-auditing, did the project deliver . Rough categories for analysis: buy or replace, expansion projects. Increase existing business: new products or services, more uncertainty than expansion projects, regulatory, safety and environmental. Decisions are bases on cash flows: not on accounting concepts (e. g. net income) Cash flows are based on opportunity costs. Cash flows are analyzed on an after tax basis.
