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Capital Expense
Yo u r C o m p a n y n a m e
Capex Summary (Option 1 of 2)2
2
1.5
0.2 0.3
3
2
0.3
0.5
0
0.5
1
1.5
2
2.5
3
3.5
4
Machine 1 Machine 2 Building 1 Building 2
InMillions
FY18 FY19
67% 32% 78%
21%
% Increase / Decrease over Previous year
This graph/chart is linked to excel, and changes automatically
based on data. Just left click on it and select “Edit Data”.
Capex Summary (Option 2 of 2)3
0.5
0.3
2
3
0.3 0.2
1.5
2
0
0.5
1
1.5
2
2.5
3
3.5
Machine 1 Machine 2 Building 1 Building 2
InMillions
FY18 FY19
This graph/chart is linked to excel, and changes automatically based on data. Just left click on it and select “Edit Data”.
67% 32% 78%
21%
% Increase / Decrease over Previous year
Capital Expenditure Details – FY 184
Repairing an existing asset so
as to improve its useful life
$500,000
Restoring property or adapting
it to a new or different use
$300,000
Starting or acquiring
a new business
$400,000
Upgrading an existing asset if
it results in a superior fixture
$800,000
Acquiring fixed, & in some
cases, intangible asset
$300,000
Preparing an asset to
be used in business
$600,000
Discounted Payback Period
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it to your needs and capture your
audience's attention.
Internal Rate of Return
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your needs and capture your
audience's attention.
Net Present Value Method
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it to your needs and capture your
audience's attention.
5
Capital Expenditure Valuation Methods
Discounted Payback Period6
Advantages
It is easy to understand & calculate
It takes into account the time value of money
This method helps in selection of a profitable project
from among mutually exclusive projects very easily
Disadvantages
Selection of appropriate rate for discounting
the cash flows is another problem
It does not take into account the cash inflows
that occur after the payback period
It is the time required to recover the initial cost of
investment through discounted inflows of a project
Instead of normal cash inflows, DCF is
employed to calculate the payback period
Discounted Payback Period – Valuation Summary7
Year Cash Inflows PV Factor at 10%
1 12,000 0.909
2 14,000 0.826
3 16,000 0.751
4 15,000 0.683
5 14,000 0.621
Year
Cash Inflows
(Rs.) (A)
PV Factor at
10% (B)
Present Value
(A*B)
Cumulative PV
of Cash Inflows
1 12,000 0.909 10,908 10,908
2 14,000 0.826 11,564 22,472
3 16,000 0.751 12,016 34,488
4 15,000 0.683 10,245 44,733
5 14,000 0.621 8,694 53,427
= 3 years + ( 43000 – 34,488) /10245
= 3 years + 0.83 years
= 3.83 yearsDiscounted
Payback Period
Cost of the Project
Rs 43,000
Solution: Computation of Discounted Payback Period
Net Present Value Method8
Under this method a stipulated rate of interest, usually the
cost of capital, is used to discount the cash inflows
Sum of PV of Cash Inflows - Sum of PV of Cash Outflows
Calculation :-
NPV < 0
NPV > 0
NPV = 0
Reject the Project
Accept the Project
Be Indifferent
Rules to Accept or Reject a Project
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NPV
Advantages &
Disadvantages NPV
It recognizes the time value of money
It takes into account the entire
series of cash flows for analysis
Advantages
Selection of project under mutually
exclusive projects is easy
Difficult to understand & calculate
Selection of the discount rate for
discounting of cash inflows is a problem
Disadvantages
9
Net Present Value – Valuation Summary10
This slide is 100% editable. Adapt it to your needs and
capture your audience's attention.
Years
Cash Inflows (Rs)
(A)
PV Factor at 10%
(B)
Present Value
(A*B)
1 1,10,000 0.909 99,990
2 1,60,000 0.826 1,32,160
3 30,000 0.751 22,530
2,54,680
NPV
= 2,54,680 – 2,00,000
= Rs 54,680
Computation of Net Present Value
Internal Rate of Return11
It is the rate which makes the net present value of a
project equal to zero
The rate of discount which equates the present value of
expected cash inflows from a project with present value of
cash outflow
Rules
IRR < Cost of Capital
IRR > Cost of Capital
IRR = Cost of Capital
Reject the Project
Accept the Project
Be Indifferent
This slide is 100% editable. Adapt it to your needs and capture your audience's attention.
IRR Advantages
& Disadvantages
Advantages
It recognizes the time
value of money
It considers cash inflows & cash outflows
over the entire life of the project
In case of mutually exclusive projects, it
helps select a project very easily
Disadvantages
It involves lengthy & tedious calculations
Sometimes a project may have
multiple IRR in which confuses users
Projects selected on the basis of higher
IRR may not be profitable in all cases
12
Internal Rate of Return – Valuation Summary13
3.08
40000
13000
==
The nearest value corresponding
to 3.08 in the present value of
annuity table for 4 years
3.1024
IRR is 11% which Corresponds to 3.1024
Payback
Period
=
Annual Cash
Inflow
Initial Investment Alternatively, Simple
Interpolation Method
11.34 %IRR
(IRR – 11) / 12-11 (3.08 – 3.1024) / 3.0373 - 3.1024=
(IRR – 11) / 1 ( -0.0224 ) / (- 0.0651)=
IRR – 11 0.34=
Rate Discount Factor
11% 3.1024
IRR 3.08
12% 3.0373
Valuation Methods Comparison14
Valuation Method Results Comments
Discounted
Payback Period
3.83 Years
▪ Your Text Here
▪ Your Text Here
Net
Present Value
54,680
▪ Your Text Here
▪ Your Text Here
Internal Rate
of Return
11.34%
▪ Your Text Here
▪ Your Text Here
Discounted Payback Period
The most suitable choice for valuation
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Capital Expense Icons Slides15
16
Additional
Slides
Clustered Bar17
15
25
50
45
52
47
40
25
0 10 20 30 40 50 60
Q1
Q2
Q3
Q4
Unit Count
Product01 Product02
This graph/chart is linked to excel, and changes automatically based on data. Just left click on it and select “Edit Data”.
Line Chart18
10
5
40
20
60
25
55
65
5
30
10
50
35
70
40
75
0
10
20
30
40
50
60
70
80
FY' 12 FY' 13 FY' 14 FY' 15 FY' 16 FY' 17 FY' 18 FY' 19
SalesinPercentage(%)
Financial Years
Product01 Product02
This graph/chart is linked to excel, and changes automatically based on data. Just left click on it and select “Edit Data”.
19
Name Here
Designation
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needs & capture your audience's attention.
Name Here
Designation
This slide is 100% editable. Adapt it to your
needs & capture your audience's attention.
Name Here
Designation
This slide is 100% editable. Adapt it to your
needs & capture your audience's attention.
Our Team
About UsThis slide is 100% editable. Adapt it to your needs &
capture your audience's attention.
01
This slide is 100% editable. Adapt it to your needs &
capture your audience's attention.
02
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03
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Circular
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22
Address
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Contact Number
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Capital Expense PowerPoint Presentation Slides

  • 1. Capital Expense Yo u r C o m p a n y n a m e
  • 2. Capex Summary (Option 1 of 2)2 2 1.5 0.2 0.3 3 2 0.3 0.5 0 0.5 1 1.5 2 2.5 3 3.5 4 Machine 1 Machine 2 Building 1 Building 2 InMillions FY18 FY19 67% 32% 78% 21% % Increase / Decrease over Previous year This graph/chart is linked to excel, and changes automatically based on data. Just left click on it and select “Edit Data”.
  • 3. Capex Summary (Option 2 of 2)3 0.5 0.3 2 3 0.3 0.2 1.5 2 0 0.5 1 1.5 2 2.5 3 3.5 Machine 1 Machine 2 Building 1 Building 2 InMillions FY18 FY19 This graph/chart is linked to excel, and changes automatically based on data. Just left click on it and select “Edit Data”. 67% 32% 78% 21% % Increase / Decrease over Previous year
  • 4. Capital Expenditure Details – FY 184 Repairing an existing asset so as to improve its useful life $500,000 Restoring property or adapting it to a new or different use $300,000 Starting or acquiring a new business $400,000 Upgrading an existing asset if it results in a superior fixture $800,000 Acquiring fixed, & in some cases, intangible asset $300,000 Preparing an asset to be used in business $600,000
  • 5. Discounted Payback Period This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Internal Rate of Return This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Net Present Value Method This slide is 100% editable. Adapt it to your needs and capture your audience's attention. 5 Capital Expenditure Valuation Methods
  • 6. Discounted Payback Period6 Advantages It is easy to understand & calculate It takes into account the time value of money This method helps in selection of a profitable project from among mutually exclusive projects very easily Disadvantages Selection of appropriate rate for discounting the cash flows is another problem It does not take into account the cash inflows that occur after the payback period It is the time required to recover the initial cost of investment through discounted inflows of a project Instead of normal cash inflows, DCF is employed to calculate the payback period
  • 7. Discounted Payback Period – Valuation Summary7 Year Cash Inflows PV Factor at 10% 1 12,000 0.909 2 14,000 0.826 3 16,000 0.751 4 15,000 0.683 5 14,000 0.621 Year Cash Inflows (Rs.) (A) PV Factor at 10% (B) Present Value (A*B) Cumulative PV of Cash Inflows 1 12,000 0.909 10,908 10,908 2 14,000 0.826 11,564 22,472 3 16,000 0.751 12,016 34,488 4 15,000 0.683 10,245 44,733 5 14,000 0.621 8,694 53,427 = 3 years + ( 43000 – 34,488) /10245 = 3 years + 0.83 years = 3.83 yearsDiscounted Payback Period Cost of the Project Rs 43,000 Solution: Computation of Discounted Payback Period
  • 8. Net Present Value Method8 Under this method a stipulated rate of interest, usually the cost of capital, is used to discount the cash inflows Sum of PV of Cash Inflows - Sum of PV of Cash Outflows Calculation :- NPV < 0 NPV > 0 NPV = 0 Reject the Project Accept the Project Be Indifferent Rules to Accept or Reject a Project This slide is 100% editable. Adapt it to your needs and capture your audience's attention.
  • 9. NPV Advantages & Disadvantages NPV It recognizes the time value of money It takes into account the entire series of cash flows for analysis Advantages Selection of project under mutually exclusive projects is easy Difficult to understand & calculate Selection of the discount rate for discounting of cash inflows is a problem Disadvantages 9
  • 10. Net Present Value – Valuation Summary10 This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Years Cash Inflows (Rs) (A) PV Factor at 10% (B) Present Value (A*B) 1 1,10,000 0.909 99,990 2 1,60,000 0.826 1,32,160 3 30,000 0.751 22,530 2,54,680 NPV = 2,54,680 – 2,00,000 = Rs 54,680 Computation of Net Present Value
  • 11. Internal Rate of Return11 It is the rate which makes the net present value of a project equal to zero The rate of discount which equates the present value of expected cash inflows from a project with present value of cash outflow Rules IRR < Cost of Capital IRR > Cost of Capital IRR = Cost of Capital Reject the Project Accept the Project Be Indifferent This slide is 100% editable. Adapt it to your needs and capture your audience's attention.
  • 12. IRR Advantages & Disadvantages Advantages It recognizes the time value of money It considers cash inflows & cash outflows over the entire life of the project In case of mutually exclusive projects, it helps select a project very easily Disadvantages It involves lengthy & tedious calculations Sometimes a project may have multiple IRR in which confuses users Projects selected on the basis of higher IRR may not be profitable in all cases 12
  • 13. Internal Rate of Return – Valuation Summary13 3.08 40000 13000 == The nearest value corresponding to 3.08 in the present value of annuity table for 4 years 3.1024 IRR is 11% which Corresponds to 3.1024 Payback Period = Annual Cash Inflow Initial Investment Alternatively, Simple Interpolation Method 11.34 %IRR (IRR – 11) / 12-11 (3.08 – 3.1024) / 3.0373 - 3.1024= (IRR – 11) / 1 ( -0.0224 ) / (- 0.0651)= IRR – 11 0.34= Rate Discount Factor 11% 3.1024 IRR 3.08 12% 3.0373
  • 14. Valuation Methods Comparison14 Valuation Method Results Comments Discounted Payback Period 3.83 Years ▪ Your Text Here ▪ Your Text Here Net Present Value 54,680 ▪ Your Text Here ▪ Your Text Here Internal Rate of Return 11.34% ▪ Your Text Here ▪ Your Text Here Discounted Payback Period The most suitable choice for valuation This slide is 100% editable. Adapt it to your needs and capture your audience's attention.
  • 17. Clustered Bar17 15 25 50 45 52 47 40 25 0 10 20 30 40 50 60 Q1 Q2 Q3 Q4 Unit Count Product01 Product02 This graph/chart is linked to excel, and changes automatically based on data. Just left click on it and select “Edit Data”.
  • 18. Line Chart18 10 5 40 20 60 25 55 65 5 30 10 50 35 70 40 75 0 10 20 30 40 50 60 70 80 FY' 12 FY' 13 FY' 14 FY' 15 FY' 16 FY' 17 FY' 18 FY' 19 SalesinPercentage(%) Financial Years Product01 Product02 This graph/chart is linked to excel, and changes automatically based on data. Just left click on it and select “Edit Data”.
  • 19. 19 Name Here Designation This slide is 100% editable. Adapt it to your needs & capture your audience's attention. Name Here Designation This slide is 100% editable. Adapt it to your needs & capture your audience's attention. Name Here Designation This slide is 100% editable. Adapt it to your needs & capture your audience's attention. Our Team
  • 20. About UsThis slide is 100% editable. Adapt it to your needs & capture your audience's attention. 01 This slide is 100% editable. Adapt it to your needs & capture your audience's attention. 02 This slide is 100% editable. Adapt it to your needs & capture your audience's attention. 03 This slide is 100% editable. Adapt it to your needs & capture your audience's attention. 04 20
  • 21. 21 Circular This slide is 100% editable. Adapt it to your needs & capture your audience's attention. 01 This slide is 100% editable. Adapt it to your needs & capture your audience's attention. 02 This slide is 100% editable. Adapt it to your needs & capture your audience's attention. 03 This slide is 100% editable. Adapt it to your needs & capture your audience's attention. 04
  • 22. 22 Address # street number, city, state Contact Number 0123456789 Email Address emailaddress@123gmail.com Thank You