Capital Budgeting

Cash flow

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Aulia Noor H 023161022
Bidari Dhaifina Y.A 023161026
Kesya Lusiana P 023161038
 Major CashFlow
Component
Relevant CashFlows

Expansion Vs Replacement
Decisions
Finding The Initial
Investment
Capital Budgeting Sunk Cost and
CashFlows Opportunity Costs
Finding The
Operating CashFlows

Finding The Terminal

CashFlows
 Capital Budgeting CashFlows adalah Salah satu sumber utama
keuntungan perusahaan tersebut. Karena dengan adanya capital
budgeting mereka dapat menghitung tingkat keuntungan yang
akan mereka dapatkan pada jangka panjangnya.

Capital Budgeting
CashFlows
 Relevant CashFlows
Tambahan aliran kas keluar dan masuk setelah pajak incremental cashflow dalam
suatu pengeluaran modal.

Major CashFlow Component

• Initial Investment : Arus kas keluar pada permulaan proyek
• Operating CashFlow : Tambahan arus kas masuk setelah pajak
yang dihasilkan dari pemanfaatan proyek
selama umur proyek tersebut
• Terminal CashFlow : Arus kas non operational setelah pajak
yang muncul pada tahun terakhir proyek,
biasanya terkait dengan likuidasi proyek

Capital Budgeting
CashFlows
 Expansion Vs Replacement Decisions
• Initial investment = Initial Investment Needed to Acquire New Asset – After Tax Cash Inflows From
Liquidation
• Operating cashflows = Operating Cash Flows From New Asset –Operating Cash From Old Asset
• Terminal cash flow = After Tax Cashflow From Termination Of New Asset – After Tax Cashflows From
Termination Of Old Assets

Sunk Cost and Opportunity Costs

• Sunk cost adalah biaya yang telah dikeluarkan dalam sebuah proyek
atau investasi dan biaya tersebut tidak dapat dikembalikan jika proyek
di hentikan atau diubah.
• Opportunity costs adalah biaya yang timbul karena memilih sebuah
kegiatan bisnis tertentu dibanding kegiatan bisnis yang lain.

Capital Budgeting
CashFlows
 Finding the Initial Investment
The Basic Format for Determining Initial
Investement
(1) Installed Cost of New Asset =
Cost of new asset
+ Installation cost
(2) After-tax proceeds from sale of old asset =
Proceeds from sale of old asset Sale and Taxes
± Tax on sale of old asset
• If Sale = BV →No tax effect
(3) Change in net working capital
• If sale > BV (but less than cost) →

Initial Investment Cash Flow = (1) – (2) ± (3) recaptured depreciation, taxed as ordinary
income
• If sale > BV (greater than cost) → anything
above cost, taxed as capital gain, rest taxed
as recaptured depreciation

Capital Budgeting • If sale < BV → capital loss → tax savings

CashFlows
 Finding The Operating CashFlows
Calculation of operating cash flows using
the income statement format
Revenue
(-) Expenses (excluding depreciation and interest)
Earnings before depreciation, interest, and taxes (EBDIT)

(-) Depreciation
Earnings before interest and taxes (EBIT)

(-) Taxes (rate = T)

Net operating profit after taxes [NOPAT = EBIT X (1 – T)

+ Depreciation
Operating cash flows (OCF)

Capital Budgeting
CashFlows
 Finding the Terminal CashFlow
The Basic Format for Determining Terminal
Cash Flow
After-tax proceeds from sale of new asset =
Proceeds from sale of new asset
± Tax on sale of new asset
(-) After-tax proceeds from sale of old asset =
Proceeds from sale of old asset
± Tax on sale of old asset
± Change in net working capital

Terminal cash flow

Capital Budgeting
CashFlows