Financial Management Undiscounted Free Cash Flows

Related BrainMass Solutions

• Determining Asset Impairment Loss

  depreciation) be compared to the sum of its estimated undiscounted future cash flows.

• Financial Management: The Internal Rate of Return

  19181 Financial Management: The Internal Rate of Return Year........

• Financial Management

  Year Undiscounted free cash flows 0 (380,000) 1 20,000 2 30,000 3 200,000 4 175,000 5 130,000 6 145,000 Required rate of return 15% Project a: Payment=5000

• Ross Technology Acquisition of Valpo Corporation

  The following amounts have been determined: Plant and equipment: Undiscounted sum of future cash flows $65 million Fair value 50 million Developed technology: Undiscounted sum of future cash flows $15 million

• FASB fair value using time value of money tools

  While the present value of future cash flows is "second best" to using a market-based valuation, it is better than reporting the undiscounted future cash flows which is clearly an exaggeration of today's value.

• Present Value - Mixed streams and Comparison

  cash flows total $150,000 in each case.

• Capital investment decision making

  Discounted pre-tax cash flows are $429,953, undiscounted after-tax cash flows are $273,600, and discounted after-tax cash flows are $221,414. The net present value of the investment is: a. $189,952 b. 33,600 c. 18.586 d. (18,586) 3.

• Conventional Cash Flows in a Project

  205163 Conventional Cash Flows in a Project Projects A and B have the same cost, and both have conventional cash flows. The total cash inflows for A (undiscounted) are $400. The total for B is $360. The IRR for A is 20%; the IRR for B is 18%.

• Cost allocation, master budgeting, capital decisions

  Discounting methods compute the present value of future cash flows (NPV and IRR). Non-discounting methods just evaluate based on undiscounted cash flows (payback and accounting rate of return).