资源描述
Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,McGraw-Hill/Irwin,Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.,Click here for title,8-,0,Chapter Outline,8.1,Corporate Strategy and Positive NPV,8.2 Decision Trees,8.3 Sensitivity Analysis,Scenario Analysis,and,Break-Even Analysis,8.4 Options,8.5 Summary and Conclusions,Introduce new products,Apple Corporation and the mouse,Develop core technology,Honda and small engines,Create barrier to entry,Qualcomms patents on proprietary technology,Introduce variations on existing products,Chryslers PT Cruiser,Create product differentiation,Coca-Colaits the real thing,Utilize organizational innovation,Motorola just-in-time inventory management,Exploit a new technology,Yahoo!s use of banner advertisements on the web,Corporate Strategy and Positive NPV,Corporate Strategy and the Stock Market,There should be a connection between the stock market and capital budgeting.,If the firm invests in a positive NPV projects,the firms stock price should go up.,Sometimes the stock market provides negative clues as to a new projects NPV.,Consider AT&Ts repeated attempts to penetrate the computer-manufacturing industry.,8.2,Decision Trees,Allow us to graphically represent the alternatives available to us in each period and the likely consequences of our actions.,Example of Decision Tree,Do not study,Study finance,Open circles represent decisions to be made.,Filled circles represent receipt of information,e.g,.a test score in this class.,The lines leading away from the circles represent the alternatives.,“,C”,“,A”,“,B”,“,F”,“,D”,Stewart Pharmaceuticals,The Stewart Pharmaceuticals Corporation is considering investing in developing a drug that cures the common cold.,A corporate planning group,including representatives from production,marketing,and engineering,has recommended that the firm go ahead with the test and development phase.,This preliminary phase will last one year and cost$1billion.Furthermore,the group believes that there is a 60%chance that tests will prove successful.,If the initial tests are,successful,Stewart Pharmaceuticals can go ahead with full-scale production.This investment phase will cost$1,600 million.Production will occur over the next 4 years.,Stewart Pharmaceuticals NPV of Full-Scale Production following Successful Test,Note that the,NPV,is calculated as of date 1,the date at which the investment of$1,600 million is made.Later we bring this number back to date 0.,Investment,Year 1,Years 2-5,Revenues,$7,000,Variable Costs,(3,000),Fixed Costs,(1,800),Depreciation,(400),Pretax profit,$1,800,Tax(34%),(612),Net Profit,$1,188,Cash Flow,-$1,600,$1,588,Decision Tree for Stewart Pharmaceutical,Do not test,Test,Failure,Success,Do not invest,Invest,Invest,The firm has two decisions to make:,To test or not to test.,To invest or not to invest.,Stewart Pharmaceutical:Decision to Test,Lets move back to the first stage,where the decision boils down to the simple question:should we invest?,The expected payoff evaluated at date 1 is:,The NPV evaluated at date 0 is:,So we should test.,8.3,Sensitivity Analysis,Scenario Analysis,and Break-Even Analysis,Allows us to look the behind the NPV number to see firm our estimates are.,When working with spreadsheets,try to build your model so that you can just adjust variables in one cell and have the NPV calculations key to that.,SensitivityAnalysisandScenarioAnalysis,IntheStewartPharmaceuticalexample,revenueswereprojectedtobe$7,000,000peryear.,Ifthey areonly$6,000,000per year,theNPVfallsto$1,341.64,Also known as“what if”analysis;weexaminehowsensitivea particularNPV calculation is to changesinthe underlyingassumptions.,Investment,Year 1,Years 2-5,Revenues,$6,000,Variable Costs,(3,000),Fixed Costs,(1,800),Depreciation,(400),Pretax profit,Tax(34%),Net Profit,Cash Flow,-$1,600,SensitivityAnalysis,Wecansee thatNPV is verysensitive to changesinrevenues.Forexample,a 14%drop in revenueleadstoa61%dropinNPV,Forevery1%dropinrevenue we canexpectroughlya 4.25%dropinNPV,ScenarioAnalysis,A variationonsensitivityanalysisisscenarioanalysis.,Forexample,the followingthreescenarioscouldapplytoStewartPharmaceuticals:,Thenextyearseach haveheavycoldseasons,andsalesexceed expectations,but labor costs skyrocket.,Thenextyearsarenormal andsalesmeet expectations.,Thenextyearseach havelighterthan normalcold seasons,so sales failtomeetexpectations.,OtherscenarioscouldapplytoFDA approval fortheirdrug.,Foreachscenario,calculate theNPV.,Break-Even Analysis,Another waytoexamine variability in ourforecastsis break-evenanalysis.,IntheStewartPharmaceuticalsexample,wecouldbeconcerned withbreak-evenrevenue,break-even sales volumeorbreak-even price.,Thebreak-evenIATCFisgivenby:,Break-Even Analysis,Wecanstartwiththebreak-evenincrementalafter-taxcashflow andwork backwardsthrough theincomestatement to backout break-evenrevenue:,Investment,calculation,Cash Flow,Revenues,Variable Costs,Fixed Costs,Depreciation,Pretax profit,Tax(
展开阅读全文