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1. Operating
Expense
Yo u r C o m p a n y N a m e

2. Capex
Summary
(Option 1 of 2)
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
FY 17 FY 18
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67% 32% 78%
21%
% Increase / Decrease over Previous year
2

3. Capex
Summary
(Option 2 of 2)
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
FY 17 FY 18
67% 32% 78%
21%
% Increase / Decrease over Previous year
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3

4. Capital Expenditure Details – FY 18
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
Upgrading an existing asset if
it results in a superior fixture
$800,000
Starting or acquiring
a new business
$400,000
Acquiring fixed, & in some
cases, intangible assets
$300,000
Preparing an asset to
be used in business
$600,000
4

5. Capital Expenditure
Valuation Methods
Discounted Payback Period
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Net Present Value Method
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Internal Rate of Return
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5

6. 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
Advantages Disadvantages
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
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
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Discounted
Payback
Period
6

7. Discounted Payback Period – Valuation Summary
Cost of the Project
Rs 43,000
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 (R)
(A)
PV Factor
(B)
Present Value
(A*B)
Cumulative PV of
Cash Inlows
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
Discounted
Payback Period
3 years + ( 43000 – 34,488) /10245
3 years + 0.83 years
3.83 years
Solution : Computation of Discounted Payback Period
7

8. Net Present
Value Method
NPV < 0
NPV > 0
NPV = 0
Reject the Project
Accept the Project
Be Indifferent
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 :-
Rules to Accept or Reject a Project
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8

9. NPV Advantages & Disadvantages
Advantages Disadvantages
NPV
Comparison to traditional method, it is
slight Difficult to understand & calculate
Selection of the discount rate for discounting
of cash inflows is another problem of NPV
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Recognizes the time value of money
Takes into account the entire
series of cash flows for analysis
Selection of project under mutually
exclusive projects is easy under NPV
9

10. Net Present Value – Valuation Summary
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
2,54,000 – 2,00,000
Rs 54,680
10

11. Internal Rate of Return
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
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11

12. Advantages Disadvantages
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
It involves lengthy &
tedious calculations
Sometimes a project may have
multiple IRR which confuses users
Projects selected on the basis of higher
IRR may not be profitable in all cases
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IRR Advantages &
Disadvantages
12

13. Internal Rate of Return – Valuation Summary
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
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
Initial Investment
Annual Cash Inflow
=
13

14. Valuation Methods Comparison
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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14

15. Operating Expense Icons Slide15

16. Additional
Slides
16

17. 70
62
55
45
35
20
15
5
50
60
68
76
83
89
95
100
0
20
40
60
80
100
0
20
40
60
80
100
120
2012 2013 2014 2015 2016 2017 2018 2019
GrowthRate(%)
MarketSize(RMB100Million)
Years
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Combo
Chart
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▪ Product 1
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▪ Product 2
17

18. 70
55
40
30
30
45
60
70
0 20 40 60 80 100
FY 19
FY 18
FY 17
FY 16
Units
FinancialYear
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▪ Product 1
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▪ Product 2
Stacked Bar
18

19. Our Mission
Vision
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Mission
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Goal
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19

20. Our Team
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Designation
Name Here
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Designation
Name Here
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Designation
Name Here
20

21. This slide is 100% editable. Adapt it to your needs
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Medium
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Minimum
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Maximum
Financial
21

22. Thank
You Email Address
emailaddress@123.com
Address
# street number, city, state
Contact Numbers
0123456789
22