These are short summary enotes for acca paper and more will be available if you message me.
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Projects may look attractive for two reasons:1) There are some errors in forecast 2)The company genuinely expects to earn excess profits.
So increase odds in your favor by moving in areas of competitive advantages.
Look at economic rents and where even advantage is absent or entry of competitors will push prices down or costs up, don’t enter .
When you have the market value of an asset use it..rather then over analysis…gold, real estate..airplanes etc…
PV calculations may vary and subject to error …that’s life!!!!!
Ethnobotany and Ethnopharmacology:
Ethnobotany in herbal drug evaluation,
Impact of Ethnobotany in traditional medicine,
New development in herbals,
Bio-prospecting tools for drug discovery,
Role of Ethnopharmacology in drug evaluation,
Reverse Pharmacology.
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
This presentation provides a briefing on how to upload submissions and documents in Google Classroom. It was prepared as part of an orientation for new Sainik School in-service teacher trainees. As a training officer, my goal is to ensure that you are comfortable and proficient with this essential tool for managing assignments and fostering student engagement.
Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
This is a presentation by Dada Robert in a Your Skill Boost masterclass organised by the Excellence Foundation for South Sudan (EFSS) on Saturday, the 25th and Sunday, the 26th of May 2024.
He discussed the concept of quality improvement, emphasizing its applicability to various aspects of life, including personal, project, and program improvements. He defined quality as doing the right thing at the right time in the right way to achieve the best possible results and discussed the concept of the "gap" between what we know and what we do, and how this gap represents the areas we need to improve. He explained the scientific approach to quality improvement, which involves systematic performance analysis, testing and learning, and implementing change ideas. He also highlighted the importance of client focus and a team approach to quality improvement.
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
The Art Pastor's Guide to Sabbath | Steve ThomasonSteve Thomason
What is the purpose of the Sabbath Law in the Torah. It is interesting to compare how the context of the law shifts from Exodus to Deuteronomy. Who gets to rest, and why?
The Indian economy is classified into different sectors to simplify the analysis and understanding of economic activities. For Class 10, it's essential to grasp the sectors of the Indian economy, understand their characteristics, and recognize their importance. This guide will provide detailed notes on the Sectors of the Indian Economy Class 10, using specific long-tail keywords to enhance comprehension.
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How to Split Bills in the Odoo 17 POS ModuleCeline George
Bills have a main role in point of sale procedure. It will help to track sales, handling payments and giving receipts to customers. Bill splitting also has an important role in POS. For example, If some friends come together for dinner and if they want to divide the bill then it is possible by POS bill splitting. This slide will show how to split bills in odoo 17 POS.
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
1. Multinational Capital BudgetingMultinational Capital Budgeting
1414ChapterChapter
Slides by Yee-Tien (Ted) Fu
114.J. Gaspar: Adapted from Jeff Madura, International Financial Management
2. Capital Budgeting
Capital budgeting involves the allocation of
scarce resources (capital and management
skills) to its most efficient use, thereby
maximizing returns to investors
In multinational capital budgeting we go a step
further to analyze projects that are located
beyond national boundaries to identify those that
utilize our limited resources most efficiently
214.
3. Chapter Objectives
To compare capital budgeting analysis of an
MNC’s subsidiary with that of its parent;
To demonstrate how multinational capital
budgeting can be applied to determine whether an
international project should be implemented; and
To explain how the risk of international projects
can be assessed.
314.
4. Subsidiary versus Parent
Perspective
• Should the capital budgeting for a multi-
national project be conducted from the
viewpoint of the subsidiary that will administer
the project, or the parent that will provide most
of the financing?
• The results may vary with the perspective
taken because the net after-tax cash inflows to
the parent can differ substantially from those
to the subsidiary.
414.
5. Subsidiary versus Parent
Perspective
• Net cash flow differences can be due to:
• Tax differentials
What is the tax rate on remitted funds?
• Regulations that restrict remittances
• Excessive remittances
The parent may charge its subsidiary high administrative fees.
• Exchange rate movements
514.
7. Subsidiary versus Parent
Perspective
• A parent’s perspective is appropriate when
evaluating a project, since any project that can
create a positive net present value for the
parent should enhance the firm’s value.
• However, one exception to this rule occurs
when the foreign subsidiary is not wholly
owned by the parent.
714.
8. Input for Multinational
Capital Budgeting
The following forecasts are usually required:
1. Initial investment
2. Consumer demand over time
3. Product price over time
4. Variable cost over time
5. Fixed cost over time
6. Project lifetime
7. Salvage (liquidation) value
814.
9. The following forecasts are usually required:
Input for Multinational
Capital Budgeting
9. Tax payments and credits
10. Exchange rates
11. Required rate of return
8. Restrictions on fund transfers
914.
10. Multinational
Capital Budgeting
• Capital budgeting is necessary for all long-
term projects that deserve consideration.
• One common method of performing the
analysis involves estimating the cash flows
and salvage value to be received by the
parent, and then computing the net present
value (NPV) of the project.
1014.
11. Multinational
Capital Budgeting
• NPV = – initial outlay
n
+ cash flow in period t
t =1 (1 + k )t
+ salvage value
(1 + k )n
k = the required rate of return on the project
n = project lifetime in terms of periods
• If NPV > 0, the project can be accepted.
1114.
15. Capital Budgeting Analysis
Period t
1. Demand (1)
2. Price per unit (2)
3. Total revenue (1)(2)=(3)
4. Variable cost per unit (4)
5. Total variable cost (1)(4)=(5)
6. Annual lease expense (6)
7. Other fixed annual expenses (7)
8. Noncash expense (depreciation) (8)
9. Total expenses (5)+(6)+(7)+(8)=(9)
10. Before-tax earnings of subsidiary (3)–(9)=(10)
11. Host government tax tax rate(10)=(11)
12. After-tax earnings of subsidiary (10)–(11)=(12)
1514.
16. Capital Budgeting Analysis
Period t
13. Net cash flow to subsidiary (12)+(8)=(13)
14. Remittance to parent (14)
15. Tax on remitted funds tax rate(14)=(15)
16. Remittance after withheld tax (14)–(15)=(16)
17. Salvage value (17)
18. Exchange rate (18)
19. Cash flow to parent (16)(18)+(17)(18)=(19)
20. PV of net cash flow to parent (1+k)- t(19)=(20)
21.Initial investment by parent (21)
22. Cumulative NPV PVs–(21)=(22)
1614.
17. Factors to Consider in
Multinational Capital Budgeting
Exchange rate fluctuations
Since it is difficult to accurately forecast
exchange rates, different scenarios can be
considered together with their probability of
occurrence.
1714.
20. Factors to Consider in
Multinational Capital Budgeting
Inflation
Although price/cost forecasting implicitly
considers inflation, inflation can be quite
volatile from year to year for some countries.
2014.
21. Factors to Consider in
Multinational Capital Budgeting
Financing arrangement
Financing costs are usually captured by the
discount rate.
However, when foreign projects are partially
financed by foreign subsidiaries, a more
accurate approach is to separate the
subsidiary investment and explicitly consider
foreign loan payments as cash outflows.
2114.
22. Factors to Consider in
Multinational Capital Budgeting
Blocked funds
Some countries require that the earnings
generated by the subsidiary be reinvested
locally for at least a certain period of time
before they can be remitted to the parent. But,
why?
2214.
23. Capital Budgeting with Blocked
Funds: Spartan, Inc.
• Assume that all funds are blocked until the
subsidiary is sold.
2314.
24. Factors to Consider in
Multinational Capital Budgeting
Uncertain salvage value
Since the salvage value typically has a
significant impact on the project’s NPV, the
MNC may want to compute the break-even
salvage value.
Impact of project on prevailing cash flows
The new investment may compete with the
existing business for the same customers.
2414.
25. Factors to Consider in
Multinational Capital Budgeting
Host government incentives
These should also be incorporated into the
analysis.
Real options
Some projects contain real options for additional
business opportunities.
The value of such a real option depends on the
probability of exercising the option and the
resulting NPV.
2514.
26. Adjusting Project Assessment
for Risk
• When an MNC is unsure of the estimated cash
flows of a proposed project, it needs to
incorporate an adjustment for this risk.
• One method is to use a risk-adjusted discount
rate. The greater the uncertainty, the larger the
discount rate that should be applied to the
cash flows.
2614.
27. Adjusting Project Assessment
for Risk
• An MNC may also perform sensitivity analysis
or simulation using computer software
packages to adjust its evaluation.
• Sensitivity analysis involves considering
alternative estimates for the input variables,
while simulation involves repeating the
analysis many times using input values
randomly drawn from their respective
probability distributions.
2714.