Capital Budgeting

Question 1

Inflation consistency

Answer 1

Either use real cf and real discount rate or both nominal

Question 2

FCF

Answer 2

OCF + WCCF + Investement CF (-investment or + disposal)

Question 3

Capital Gains Tax

Answer 3

t(SV - BV)
+ CF when SV>BV

Question 4

EBIT

Answer 4

+Sale Revenue
- COGS
- Operating Costs
- Deprec. and Amt.

Question 5

OCF

Answer 5

+EBIT
-Tax
+Dep. Amt.

or

EBIT(1-t) + Amt. Dep.

Question 6

Working Capital

Answer 6

Accounts Receivable + Inventory -Accounts payable

Question 7

WC CF

Answer 7

• Change WC

Question 8

CF from investments

Answer 8

• CAPEX
  or
  (-io a 0, +venta al final, +cap gains tax al final)

Question 9

CAPEX españa

Answer 9

Cambio AF neto + Amt. t
o
Cambio AF bruto

Question 10

Tax shield

Answer 10

Depreciation. amt. * t

Question 11

Straight line dep.

Answer 11

(Begining BV - Estimated SV) / n years

Question 12

MACRS dep.

Answer 12

Tabla dependiente de n años,
x% del begining BV cada año

Question 13

Real Discount rate

Answer 13

((1+Nominal DR)/(1+IR)) -1

Question 14

Real CF n

Answer 14

Nominal CF n / (1+IR)^n

Question 15

VAN (NPV)

Answer 15

CF1/(1+i) + CF2(1+i)^2 … + CFn/(1+i)^n