What Is the Process of Capital 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