Net Present Value: Micron to acquire Elpida

NPV of Micron Technology: 1) elaborate inaugurate value (PV) of fall 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 silver 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 studyed. The positive solve present value signifies that future immediate payment flow amounts be able to cover the initial cash outflow. This project put eat up out add $51,776.51 to Micron Technologys value. Capital bud redeeming is the planning function used by fiscal managers for do major swell 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 project, pecuniary managers are able to sic whether long terminal investments such as advanced equipment or machinery, new products, and new research and development projects, are a viable filling worth pursuing. Primarily, the stated objective of a publicly traded companies pecuniary management team is the maximization of the wealth of its divisionholders. Shareholder wealth increases through th e receipt of dividends and through the incre! ase in the division price over time. Fluctuations in the share price backside help stockholders gauge the success of a recent fiscal management decision. Therefore a firms objective of maximizing stockholder wealth is interchangeable with the objective of maximizing the... If you want to get a full essay, order it on our website: OrderCustomPaper.com

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