SLal Pir Cash Flows Free Cash Flow Calculat 8 9 10 11 2011 2012 2013 2014 67.4 67.1 66.8 66.6 35.1 35.7 36.3 37.0 12.8 12.9 12.9 12.9 89.7 89.9 90.2 90.7 15.5 15.4 15.4 15.3 74.2 74.5 74.8 75.4 EBIT + Depr. - Cap. Ex. - WC Inc. Oper. CF - Taxes Free CF NPV: 1 2004 69.4 30.6 12.5 87.5 16.0 71.5 2 2005 69.1 31.3 12.5 87.9 15.9 72.0 3 2006 68.8 31.9 12.6 88.1 15.8 72.3 4 2007 68.5 32.5 12.6 88.4 15.8 72.6 5 2008 68.3 33.1 12.7 88.7 15.7 73.0 6 2009 68.0 33.8 12.7 89.1 15.6 73.5
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AES Case study approach Cost of Capital for Lal Pir Project Levered Beta Cost of Equity Calculation Cost of Debt Calculation Weighted Average Cost of Capital Calculation Discount Rate Calculation Calculating the Range of Discount Rates for AES Cost of Equity Calculation Cost of Debt Calculation Weighted Average Cost of Capital Calculation Discount Rate Calculation If the project was in USA, PV of Cash Flows Project Value* Abstract: AES has been using a single discount
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9-204-109 REV: OCTOBER 23, 2006 MIHIR DESAI Globalizing the Cost of Capital and Capital Budgeting at AES In June 2003, Rob Venerus, director of the newly created Corporate Analysis & Planning group at The AES Corporation, thumbed through the five-inch stack of financial results from subsidiaries and considered the breadth and scale of AES. In the 12 years since it had gone public, AES had become a leading independent supplier of electricity in the world with more than $33 billion in assets
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If Venerus implements the suggested methodology, what would be the range of discount rates that AES would use around the world? Does this make sense as a way to do capital budgeting? Venerus framework consisted of fairly simple set of rules in which a 12% discount rate was used for all the projects and he felt that this model worked fairly well in a world of domestic contract-generation projects. After AES’s international business expansion the model become increasingly strained with the expansions
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strengths of each member. Suggested Questions Identify the companies with an industry. Marriott Corporation: The Cost of Capital Substantive Issues This case provides you with the opportunity to explore how a company uses the capital asset pricing model (CAPM) to compute the cost of capital for the company and for each of its divisions. The weighted average cost of capital (WACC) formula and the mechanics
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as corporations go global, a world of finance opens up within them, presenting new opportunities and challenges for CFOs. Rather than simply make aggregate capital-structure and dividend decisions, for example, they also have to wrestle with the capital structure and profit repatriation policies of their companies’ subsidiaries. Capital budgeting decisions and valuation must reflect not only divisional differences but also the complications introduced by currency, tax, and country risks. Incentive systems
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and roles increase. The leaders of growing organizations have more planning and decision-making to do. These organizations that are global put an effect on those with financial opportunities in three principal areas: financing, risk management, and capital budget. CFO’s of organizations can reduce the overall financing caused by mixing the internal and external debt of affiliates in several countries. There’s an example of how money can be borrowed from one subsidiary with increased tax rates and loaned
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on financing, investment, risk management and incentive management within a multinational firm. This framework emphasizes the need to reconcile conflicting forces in order for multinational firms to gain competitive advantage from their internal capital markets. The paper concludes with a discussion of the course's pedagogical approach and detailed descriptions of all the course materials, including 19 case studies, corresponding teaching notes, several module notes and supplementary materials.
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_________________________________________________________________________ Course Description My aim is to work with you on both concepts that are useful in dealing with international currency issues when operating across national boundaries and on recent developments in the capital markets and financing. The context of the course will be financial issues of importance to corporations, fund managers, and investors. The instructional focus will be individual development. The course aims to develop professional effectiveness
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------------------------------------------------- FIFTH SEMESTER BAS 311 | Methods of Food Analysis | 2 0 3 4 | | TheoryUNIT – I Introduction to Food Analysis: Rules & Regulations of Food Analysis, Safety in Laboratory. Sampling and sampling techniques, sample preparation for analysis. Basic principles of spectroscopy: UV-VIS molecular absorption spectrometry, atomic absorption & emission spectrometry, fluorescence spectrometry, Atomic mass spectrometry, IR spectrometry.UNIT
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