What Is Capital Expenditure Budgeting?

This book is part of "Modern Enterprise Budget Management Series". The book uses a large number of examples, diagrams, and explanations, and each budget technology introduction is matched with a case and can be easily applied to practical operations. At the same time, a large number of comparative analysis methods are used to connect various budgeting technologies in series, and compare their advantages and disadvantages, so that readers can gain a high level of understanding and overall grasp of the entire budget system.

Capital expenditure budget

Enterprise budgeting is a comprehensive plan for the operation of the entire enterprise. Budget management is a more advanced modern enterprise management method. It has a direct or indirect relationship with everyone in the enterprise, especially the management.
This book strives for a good combination of theory and practicality. For some required mathematical methods, this book accurately conveys its meaning while avoiding tedious formula derivation.
This book strives to "interpret the thoughts of economists with the thinking of ordinary readers", and its readership does not need to accept specialized

Capital Expenditure Part I Capital Budget under Certainty

Chapter 1 Capital Budgeting
1.1 Strategies for making investment decisions
1.2 Net Present Value and Productivity
1.3 Cash flow of investment projects
1.4 Estimates of cash flow
1.5 Strategic Net Present Value
1. 6 Application of Capital Budgeting Technology
1.7 Standards for Investment Value Evaluation Methods
1.8 Budget and planning process
1.9 Summary
Chapter 2 Time Value of Money
2.1 Time discount
2.2 Final value
2.3 Indifference of Time Value of Money: Present Value
2.4 years equivalent amount
2.5 Nominal interest rate and annual percentage
2.6 Continuous Cash Flow and Continuous Discount
2.7 Summary
Chapter 3 Capital Budgeting: Implications for Net Present Value
3.1 Capital Budgeting Decisions
3.2 Decision criteria of the net present value method
3.3 Cash held in hand today
3.4 Investment opportunities and alternative use plans of funds
3.5 Present value factor: the price of currency
3.6 Two interpretations of present value
3.7 Logical basis of the net present value method
3.8 Practicality
3.9 Net final value
3.10 0 hour
3.1l repeated calculation method
3.12 Why are there investment projects with a positive net present value?
3.13 Summary
Chapter 4 Measuring the Value of Investment Projects: Decisions under Certainty
4.1 Classification of investment projects
4.2 Measurement of investment value
4.3 Composition of cash flow planning
4.4 Two discounted cash flow methods
4.5 Observation Ranking
4.6 Discounted cash flow method
4.7 Limitations of investment project ratings
4.8 The practice of the company
4.9 Summary
4.10 Appendix: Formula of discounted cash flow method
Chapter 5 Mutually Exclusive Investment Projects
5.1 Net Present Value
5.2 Decision of acceptance or rejection
5.3 Mutually Exclusive Investment Projects
5.4 Present value and final value
5.5 Why do companies generally use the internal rate of return method?
5.6 Summary
Chapter 6 Determinants and Applications of Cash Flow
6.1 Cash flow
6.2 opportunity cost
6.3 Determinants of Cash Flow
6.4 Depreciation method
6.5 Impact of tax calculations on investment analysis
6.6 Summary

Capital expenditure budget part two capital budget practice and operation issues

Chapter 7 Equivalent Annual Costs and Replacement Decisions
7.1 Equivalent annual cost
7.2 Make or buy
7.3 Comparability
7.4 Replacement decision
7.5 replacement chain
7.6 Summary
Chapter 8 Capital Budgeting Under Capital Allocation
8.1 External capital rationing
8.2 Internal capital rationing
8.3 Ranking of investment projects
8.4 Present value index (profitability index)
8.5 Planning and Solving
8.6 Capital rationing and risk
8.7 Summary
Chapter 9 Capital Budgeting and Inflation
9.1 What is inflation
9.2 Actual cash flow
9.3 Actual discount rate and nominal discount rate
9.4 Tax effect
9.5 Real returns and inflation
9.6 Summary
Chapter 10 Accounting Concepts Consistent with Present Value Calculations
10.1 Economic Depreciation
10.2 Residual income
10.3 The size of the rate of return
10.4 Tax effects
10.5 Focus on the long-term, taking into account the short-term
10.6 Summary
Chapter 11 Buying or Leasing
11.1 Borrowing or Leasing: A Financial Decision
11.2 Leasing is a debt
11.3 Buying or Leasing Decisions When Taxes Exist: Borrowing Rates After Taxes Are Used
11.4 Using risk-adjusted discount rates
11.5 Risk Factors in Buy-Lease Decisions
11.6 Uncertainty
11.7 discount rate
11.8 Lease of land
11.9 Leveraged Leasing
11.10 Summary
Chapter 12 Investment Timing
12.1 Basic Principles for Deciding When to Start and End a Process
12.2 Growth Investment
12.3 Equipment replacement
12.4 Strategies for determining capacity
12.5 Summary
Chapter 13 Fluctuations in Output Rates
13.1 When the factory has only one type of equipment
13.2 Optimal Equipment Combination
13.3 In the case of multiple periods or multiple equipment types
13.4 Summary
Chapter 14 Investment Decisions with Additional Information
14.1 Opportunities for repeated investment
14.2 Basic Model
14.3 Calculation Examples
14.4 Sample Investment: Prior Normal Distribution and Improved Information
14.5 Imperfect Information
14.6 Post-event audit bias
14.7 summary
14.8 Appendix: Calculation of Modified Probability
Chapter 15 Overseas Investment
15.1 Currency Exchange
15.2 Relevance of future plans
15.3 Consider Leveraged Operations
15.4 Taxation
15.5 Overseas Investment and Risk
15.6 Summary
Chapter 16 Government Economic Evaluation of Investment Projects
16.1 Differences between market prices and opportunity prices
16.2 The indivisibility of the project
16.3 external effects
16.4 Government Investment
16.5 Cost-benefit analysis
16.6 How federal officials analyze purchase or lease decisions
16.7 Summary

Capital expenditure budget Part III Capital budget under uncertainty

Chapter 17 Capital Budgeting Under Uncertainty
17.1 State Preference
17.2 Comparison of the State Preference Method and the Present Value Method
17.3 Valuation Model
17.4 Understanding the Project
17.5 summary
Chapter 18 Discount Rates and Uncertainty
18.1 Funding Sources
18.2 Cost of retained earnings
18.3 Stock Value Theory
18.4 Changes in Stock Prices
18.5 Accumulated depreciation and capital costs
18.6 Issuance of Ordinary Shares
18.7 Issuance of Ordinary Shares: Time Element
18.8 delayed investment
18.9 Long-term debt costs
18.10 Cost of short-term liabilities
18.11 Liabilities and income taxes
18.12 Weighted average cost of capital
18.13 Optimal capital structure
18.14 Weighted average cost of capital and discount rate
18.15 Summary of Weighted Average Capital Cost
18.16 Discount rate without default risk
18.17 Borrowing interest rate
18.18 Comparison of average and marginal rates of return
18.19 Discounted Equity Cash Flow
18.20 Adjusted Present Value Method
18.2l Summary
Chapter 19 State Preference
19.1 price determination
19.2 Uncertain Price
19.3 Multi-Phase Investment
19.4 Summary
Chapter 20 Capital Asset Pricing Model
20.1 Relationship with State Preference Model
20.2 Portfolio Analysis
20.3 Effective Boundaries
20.4 Capital Market Line
20.5 Securities Feature Line
20.6 Systemic and non-systemic risks
20.7 Securities Market Line
20.8 Necessary rate of return and cost of capital
20.9 Investment Decisions
20.10 Summary
20.11 Appendix: Derivation of Risk-Adjusted Present Value
Chapter 21 Flexibility Evaluation: Application of Option Valuation Methods
21.1 Options
21.2 Call Option Pricing
21.3 Option Pricing: Binomial Model
21.4 Constructing a Hedged Asset Portfolio
21.5 Black-Scholes Model
21.6 Defining a Sell Option
21.7 Valuation of options without hedging asset portfolio
21.8 open space
21.9 Situations involving options in real assets
21.10 Put Options in Real Assets
21.11 Implied Options
21.12 Advantages of the Option Method
21.13 Disadvantages of the Option Method
21.14 Summary
Chapter 22 New Approaches to Uncertainty
22.1 Model
22.2 Another Derivation Process
22.3 Application of SDR Criteria
22.4 some present value factors
22.5 summary
22.6 Appendix
Translator (editor) postscript

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