Introduction to Managerial Accounting Jeannie M. Folk Ray H. Garrison Eric Noreen
Capital Budgeting Decisions
Chapter Outline- Capital Budgeting-Planning Investments
- Typical Capital Budgeting Decisions
- The Time Value of Money
- The Net Present Value Method
- Emphasis on Cash Flows
- Simplifying Assumptions
- Choosing a Discount Rate
- An Extended Example of the Net Present Value Method
- Expanding the Net Present Value Method
- The Total-Cost Approach
- The Incremental-Cost Approach
- Least-Cost Decisions
- Preference Decisions-The Ranking of Investment Projects
- The Internal Rate of Return Method
- The Net Present Value Method and Income Taxes
- Other Approaches to Capital Budgeting Decisions
- The Payback Method
- Evaluation of the Payback Method
- An Extended Example of Payback
- Payback and Uneven Cash Flows
- The Simple Rate of Return Method
- Criticisms of the Simple Rate of Return
- Postaudit of Investment Projects
- Appendix 12A: The Concept of Present Value
- The Theory of Interest
- Computation of Present Value
- Present Value of a Series of Cash Flows
- Appendix 12B: Future Value and Present Value Tables
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