Capital Budgeting and Corporate Valuation discusses methods for evaluating capital investments and valuing companies. It outlines quantitative methods like net present value (NPV), internal rate of return (IRR), payback period, and profitability index that use discounted cash flow analysis and the time value of money. It also notes that qualitative factors like strategy, competition, and resources must be considered. Corporate valuation looks at book value, market value, liquidation value, replacement value, and discounted cash flow value based on future earnings.

1. Capital Budgeting and Corporate Valuation Pricing your expansion and determining the value of your company.

6. Multiply present value and present value factor Present value factor is equal to present value/future value Year 0 1 2 3 4 5 Future Value 1.00 1.12 1.25 1.41 1.57 1.76 Present Value Factor 1.00 .893 .797 .712 .635 .567

9. Machinery Cost Savings Project Exceeds the 12% hurdle PRESENT VALUE TOTAL IS 102469 Year 0 1 2 3 4 5 PVF 1 .8929 .7972 .7118 .6355 .5674 Base Cash Flows (100000) 30000 30000 30000 30000 20000 Present Value (100000) 26786 23916 21353 19066 11349 Net Present Value 2469