Net Present Value: Micron to acquire Elpida

NPV of Micron Technology: 1) elaborate demo value (PV) of notes in period (CF) PV of CF = CF1 / (1+r)t + CF2 / (1+r)t + CF3 / (1+r)t + CF4 /(1+r)t + CF5/ (1+r)t Where: t = Periodic currency flow payments (years) CF = Cash Flow Amount r = Discount sum up = 5% PV of CF = 350,000/(1+.05)1+939,000/(1+.05)2+1,122,000/(1+.05)3+500,000/(1+.05)4+ 900,000/(1+.05)5 =333,333.33+ 851,700.68 + 969,225.79 + 411,353.35 + 705,163.36 PV of CF = 3,270,776.51 2) Calculate NPV NPV = -3,219,000 + 3,270,776.51 NPV = $51,776.51 This project should be raiseed. The positive solve present value signifies that future notes flow amounts be enough to cover the initial cash outflow. This project put cumulus out add $51,776.51 to Micron Technologys value. Capital budgeting is the planning solve used by fiscal managers for do major detonating device investment decisions. Project evaluation involves identifying the possible projects relevant cash flows; the incremental changes to a firms overall cash flow (increase or decrease) that are of a direct effect of the decision to accept the project. By estimating the incremental cash flow associated with each potential drop project, pecuniary managers are able to sic whether long term investments such as parvenue equipment or machinery, new products, and new research and development projects, are a viable extract worth pursuing. Primarily, the stated objective of a publicly traded companies monetary management team is the maximization of the wealthiness of its divisionholders. Shareholder wealth increases through the receipt of dividends and through the increase in the piece of ground price over time. Fluctuations in the share price fecal matter help stockholders gauge the success of a recent financial management decision. Therefore a firms objective of maximizing shareholder wealth is interchangeable with the objective of maximizing the... If you want to get a full essay! , order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay