Sumários
Capital budgeting risk analysis + Capital Structure
25 Novembro 2019, 10:00 • JOÃO CARLOS CARVALHO DAS NEVES
Capital budgeting risk analysis
Risk and uncertainty
Sources of risk in investments
Methods in finance for capital budgeting risk analysis.
Financial modeling principles in excel
The use of Excel and Crystal Ball
The Otobai case using:
NPV break even analysis in Excel
Sensitivity analysis with one variable and two variables in Excel
Scenario analysis in Excel
Monte Carlo simulations with Cystal Ball
Sensitivity analysis in Crystal Ball
Tornado analysis in Crystal Ball
Capital Structure
Capital structure theories
Capital structure in practice
Capital structure in an international environment
Hebac Case + EVA
20 Novembro 2019, 10:00 • JOÃO CARLOS CARVALHO DAS NEVES
The HEBAC Case
Application of the three methods to HEBAC CO an exercise in the ACCA exam in 2016
Economic Value Added
EVA a performance measure that may help focusing management in value creation and vale drivers
EVA formula and strategic actions to improve performance: Operations to improve performance, financial managment that reduce WACC, investments with higher return than WACC and divest from projects that are not creating value
Present value of EVA is MVA (Market Value Added)
And MVA equals NPV of discounted cash flows and CAPEX
Example in a spreadsheet
EVA + Risk analysis in Capital Budgeting
18 Novembro 2019, 10:00 • JOÃO CARLOS CARVALHO DAS NEVES
Economic Value Added
EVA a performance measure that may help focusing management in value creation and vale drivers
EVA formula and strategic actions to improve performance: Operations to improve performance, financial managment that reduce WACC, investments with higher return than WACC and divest from projects that are not creating value
Present value of EVA is MVA (Market Value Added)
And MVA equals NPV of discounted cash flows and CAPEX
Example in a spreadsheet
Risk Analysis in Capital Budgeting
Risk versus uncertainty
Sources of risk and uncertainty in investment projects
Methods that may be use to understand better risk in a investment project
Methods used in this course:
NPV break even analysis
Sensitivity analysis - one input variable adn two input variables
Scenario analysis
Monte Carlo simulations
Limits of each of the techniques
IRR + Capital rationing + the 3 NPV models
13 Novembro 2019, 10:00 • JOÃO CARLOS CARVALHO DAS NEVES
IRR
Why IRR is misleading in comparison to NPV
The modified internal rate of rate as an alternative to IRR
Capital rationing
The PI and the use of linear programming to optimize the use of capital in value creation
the three DCF models
The discounted cash flow - general model
The equity approach - Equity cash flow, cost of equity and terminal value based on levered growth or estimated selling price of fixed assets
The entity approach - WACC approach and APV approach
WACC approach - Net operational cash flow, WACC and terminal value based on levered growth or estimated selling price of fixed assets
APV - Net operational cash flow, Unlevered cost of capital, value created by debt
Value created by debt as a result of tax shield and difference between interest rate of the loan and market interest rate
The 3 DCF methods + application
11 Novembro 2019, 10:00 • JOÃO CARLOS CARVALHO DAS NEVES
The discounted cash flow - general model
The equity approach - Equity cash flow, cost of equity and terminal value based on levered growth or estimated selling price of fixed assets
The entity approach - WACC approach and APV approach
WACC approach - Net operational cash flow, WACC and terminal value based on levered growth or estimated selling price of fixed assets
APV - Net operational cash flow, Unlevered cost of capital, value created by debt
Value created by debt as a result of tax shield and difference between interest rate of the loan and market interest rate
Application of the three methods to HEBAC CO an exercise in the ACCA exam in 2016