Management and Organizational Studies 2310A/B Chapter Notes - Chapter 9: 0 (Year), General Instruction Of The Roman Missal, Cash Flow

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2310A/B
• Professor: Danny Morrison

Document Summary

9. 1 the capital budgeting process: capital budgeting: lists the projects and investments that a company plans to undertake during future years. Prices of eg. tech fall due to competition for most industries competition tends to reduce profir margin overtime. Taxes: marginal corporate tax rate: tax rate it will pay on an incremental dollar of pre tax income. Taxes and negative ebit: as long as company earns taxable income elsewere in year 0, which it can offset losses, payless in taxes. Unlevered netincome calculation: when given depreciation add depreciation back and suptract cca. Pro forma statement: a statement that is not based on actual data but rather depics a firms financials under a given set of hypothetical assumptions. 9. 3 determining incremental free cash flow: free cash flow: incremental effect of a project on the firms available cash. Calculating free cash flow from earnings: earnings include non cash charges such as ccabut does not include cost of capital investment capial expenfitures.