Net Present Value and Free Cash Flow Essay example

1. Given the proposed financing plan, describe your approach (qualitatively) to value AirThread. Should Ms. Zhang use WACC, APV or some combination thereof? Explain. (2 points) * From the statement of AirThread case, we know that American Cable Communication want to raise capital by Leveraged Buyout (LBO) approach. This means ACC will finance money though equity and debt to buy AirThread and pay the debt by the cash flows or assets of AirThread. * In another word, it’s a highly levered transaction using a fixed WACC discount rate; however the leverage is changing in fact. * If we want to use WACC method, one assumption must be met: this program will not change the debt-equity ratio of AirThread. Under LBO approach, it’s†¦show more content†¦* Jennifer decided to use Bianco’s recommendation, a 5% equity market risk premium (=5%) * Interest rate had a 125bp spread over the current yield on 10-year US Treasury bonds (=4.25%). * By CAPM, we can get (8.3277% ). We can calculate the each of different companies and get the average value. Or we can use CAPM once from average =0.8155. These two results are equivalent. * We already know the new is the interest rate of debt (5.5%). We use the average industry level (40.1%) as ATC’s D/E ratio like discussed in case page 7. By, we can get the new (9.46%). * By, we can calculate the new WACC is 7.7%. Ms. Zhang should us the new WACC to the terminal value * She is considering the cash flow paid to all the equity or debt holders. So she cannot use the equity cost of capital. 3. Compute the unlevered free cash flow and the interest tax shields from 2008 to 2012 based on estimates provided in Exhibit 1 and Exhibit 6. (3 points) Unlevered Free Cash Flow Chart 2 Free cash flow is calculated as: EBITÃâ€"1-t+Depreciationamp;Amortization Expense-Increase In NWC-Capital Expenditure * First, we calculate the Net Operating Profit after Tax, which is equals to EBITÃâ€"1-t. * Second, we use the working capital assumptions to calculate the net working capital: The formulas are: Account Receivable=Total RevenueÃâ€"41.67360 Days Sales Equip. Rev. =EquipmentÃâ€"154.36360 Prepaid Expenses= (System OperatingShow MoreRelatedFin/370 Caledonia Products Essay examples786 Words   |  4 Pagesorganization analysis will focus on free cash flows, projection of cash flows, projects initial outlay, cash flow diagram, net present value, internal rate of return, and if the project should be accepted. Why focus on project free cash flows Team B believes that Caledonia should focus on the project’s free cash flows and not the accounting profits. Evidence exists that the accounting profits will be earned by the project because there is a positive cash flow to the shareholders. With any investmentRead MoreCaledonia Project939 Words   |  4 Pagesfocus on project free cash flows as opposed to the accounting profits earned by the project when analyzing whether to undertake the project? Caledonia should focus on cash flows, because free cash flows can be reinvested when received, unlike accounting profits which are shown when earned, and not at the time cash is received. The company should focus on incremental after-tax cash flows. This enables it to analyze the profits or losses after comparing cash flows with or without theRead MoreCaledonia Products Integrative Problem1529 Words   |  7 Pagesinvolves both the calculation of the cash flows associated with a new investment and the evaluation of several mutually exclusive projects. The company is currently in the 34% tax bracket with a 15% discount rate because this project is considered a fad project it will only last five years then it will be terminated. This paper will focus on free cash flows, projection of cash flows during years 1-5, projects initial outlay, cash flow diagram, net present value, internal rate of return, and if theRead MoreAirthread Connections1019 Words   |  5 PagesCapital) - When we are supposed to value AirThread Connections with the WACC valuation method we will have to use the following steps: * Determine the unlevered free cash flows of the investment. * Compute the weighted average cost of capital with the following formula: * Compute the value with leverage, VL, by discounting the free cash flows of the investment using the WACC. APV (Adjusted Present Value) – This method involves determining the value of a levered investment using theRead MoreDiscounted Cash Flow (Dcf) Analysis1394 Words   |  6 Pages***************************** Table of contents SECTION 1: OVERVIEW DCF in theory and in practice Unlevered vs. levered DCF SECTION 2: MODELING THE DCF Modeling unlevered free cash flows Discounting to reflect stub year and mid-year adjustment Terminal value using growth in perpetuity approach Terminal value using exit multiple approach Calculating net debt Shares outstanding using the treasury stock method Modeling the weighted average cost of capital (WACC) Sensitivity analysis using data tables Modeling synergies Read MoreOcean Carriers829 Words   |  4 Pagesand Analysis We have carefully reviewed and analyzed the proposal for Ocean Carriers to lease a ship for a three-year period, beginning in early 2003. Our extensive analysis included considering the cash flows over the lifetime of this investment. We concluded that based on the expected future cash flows of this project the opportunity to take on the contract would not be advantageous for Ocean Carriers. We first considered the future expectations of the spot and daily hire rates. These rates areRead MoreCalaveras Vinesyard Case876 Words   |  4 Pagesthe adjusted present value method to come up with the value of the company. With this method, I assume that the whole firm is financed only through equity. Therefore, when calculating the free cash flow, debt was not taken into account. Despite that, the net present value of interest shields is added back to compensate the debt in the capital structure. With this method, the company is valued at $9.62 million. In order to assess Calaveras’ value, I calculated the free cash flow from 1994 to 1998Read MoreCaledonia Products Integrative Problem1039 Words   |  5 Pages Daneene Barton Caledonia Products is determining a new business proposal. The organization is planning a free cash flow investment and evaluating a project to determine the net present value of the business proposal. In the project financial analyst from Caledonia Products will consider the net value versus the internal rate of return. The research will determine if the organization will become profitable over the duration of five years. Research willRead MoreCapital Valuation Paper1634 Words   |  7 Pagesmarket value is often different from book value because the market takes into account future growth potential.† This paper will show 6 different valuation models showing the market price of Berkshire Hathaway Inc.’s debt, if any, and equity. Along with the models this paper will show calculations to support these findings, including those involving rates of return. Finally, Team D will defend which valuation model best supports their findings. FCF Valuation Berkshire Hathaway’s free cash flow accordingRead MoreCaledonia Problem1126 Words   |  5 PagesWhy should Caledonia focus on project free cash flows as opposed to the accounting profits earned by the project when analyzing whether to undertake the project? It is important that Caledonia Company should focus on the free cash flows instead of the accounting profits. With the free cash flows that the company receives they can reinvest. To accurately analyze the timing of the benefit or cost we can examine the cash flows. The only cash flows that the company should be interested

Should Abortion Be Legal - 1522 Words

When one hears the word ‘abortion’ a lot of emotions and mixed feelings come to mind. Abortion has been and always will be a topic of heated debate. Whether one is ‘pro-choice’ or ‘pro-life’ can depend on many different factors. One’s upbringing and religious views play a major role when it comes to supporting abortion or not. There are many reasons that a woman could be getting an abortion therefore people should not be quick to judge. If a woman feels like her life or the child’s life will not be suitable for survival, then she should be respected for her decision. A woman is responsible for her own body and the actions that occur to her own body. Therefore, abortion should be solely a woman’s choice. A person can chose to get an†¦show more content†¦I believe that all the reasons above are just reasons one would get an abortion. If one cannot afford a child and does not have enough time to give the child enough love and attention, a child should not be brought into that type of environment in the first place. These reasons should be taken into consideration when one is judging another about their decision to get an abortion. Another argument that is brought up a lot is that if a woman makes the decision to participate in sexual intercourse then she should pay the consequences that could possibly arise from it. Sex is a completely normal act of nature that no one should be punished by. Although there are many precautions one can take to avoid problems such as an unexpected pregnancy, accidents happen and no one is ever one hundred percent protected. Abortion is a last resort for those not prepared or suitable to raise a child. Certain people may argue that everyone has a ‘right to life’ but when it comes to determining what is considered a human it is difficult because there are many factors to ponder. The right to life concept is one I strongly agree with, however I do not bel ieve that a newly conceived fetus is considered a human. â€Å"Thus it is clear that that even though a seven- or eight month fetus has features which make it apt to arouse†¦ Nevertheless it seems safe to say that is not fully conscious, in the way that an infant of a few months is, and that it can not reason, or communicate†¦ does not engage in

Vygotskys Social Development Theory Education Essay Free Essays

The following attack examined was category administration, as students were grouped by ability. The ‘Red ‘ group reflected higher ability, this included Child X, ‘Yellow ‘ , in-between ability and ‘Green ‘ , lower ability. All were taught stuff with similar academic content but at a gait and deepness that reflected the varying abilities. We will write a custom essay sample on Vygotskys Social Development Theory Education Essay or any similar topic only for you Order Now This distinction allowed to react to the cognitive difference of where the pupil was, to where the pupil needed to be, a construct which chiefly derived from Vygotsky ‘s Social Development Theory ( Vygotsky 1962, citied in Daniels, 2005 p127 ) . To put this theory in school context, the instructor would try to embrace the spread between the kid ‘s current degree of accomplishment and comparison against the developmental result when supported by an grownup. For illustration, during a phonics session, the green group were given a undertaking related to the ‘ch ‘ sound, whereas Child X and the ruddy group were given this, in add-on to the ‘ture ‘ sound. This undertaking alteration model accommodated and extended the higher ability degrees, leting this to be an effectual pedagogical method in maximizing the acquisition procedure. This process has been found to assist pupils go focussed as independent scholars, as the course of study has been tailored to single rational demands, instead than a one-size tantrums all attack ( Carolan and Guinn p44, 2007 ) . On the other manus, the school ‘s assorted ability process can besides impede run intoing the kid ‘s rational demands. For illustration, in a maths session, the figure bond work sheets provided to the green and xanthous groups concentrated on basic accomplishments and repeat which meant cognitive demands were low and did non stretch middle-ability students. The above activities allowed few chances for treatment and did non advance analysis or creativeness. An article by Jessica Shepard, ( The Guardian online, 2012 ) even suggested that this signifier of grouping â€Å" exacerbates unfairnesss † with Kate Aspin from the TES Online Magazine ( 2010 ) besides adding that efficaciously seting distinction into pattern may be one of the greatest challenges in the NQT twelvemonth. Despite the latter remark, which is of personal relevancy as a possible Newly Qualified Teacher, this school ‘s method did inform that to force all kids to command of content, they need to be pushed at different rates, based on single strengths. However, for those who did happen the activities disputing, peer support was offered. For illustration, with the phonics undertaking, Child X had completed her activity, she sat with the EAL kid and explained the undertaking utilizing her personal methods. She made certain her spouse was remaining on-task, enjoyed more duties and the EAL kid was bettering academically. This pattern is supported through Rose ( 2010, p257 ) , who suggested it was good to redistribute accomplishments and abilities and partner offing high-performing students with those fighting in category. Associating back to Maslow ‘s Hierarchy of Needs ( 1970 ) , every bit good as physiological, safety and self-esteem demands, societal demands had to be met. This method allowed kids to do friends and improved societal accomplishments, which are imperative before self-actualization can be achieved. Evidence besides suggests that vulnerable kids and benefit most from engagement ( Farrell, 2000 ) . Hence in this co ntext, the chance to be a equal protagonist besides allowed to advance inclusion. For future mention, it appears peer support methods would be an effectual educational technique to turn to holistic demands through instruction, mediation and hearing. The school besides offered many extracurricular commissariats such as art, ICT accomplishments, football and badminton. Child X was portion of the badminton squad and there were presently treatments sing coaction with partnership schools through the community Successful Holistic Innovative Nurturing Education ( SHINE ) Scheme. This scheme gave School A the inducements needed to work in partnership with other schools, to enable every student ‘s endowments to be developed within the local community. Child X was excited to non merely vie against other schools, but besides had friends within them. This strategy initiated several characteristics that are straight linked to positive kid development. These included, regular engagement agendas, accent on accomplishment development, and engagement in meaningful interaction. Eccles and Gootman ( 2002 ) besides found that through local school community enterprises, kids learn how to research and act upon in the universe environing them. This suggested that School A ‘s after school plans ‘ possessed the power to advance general wellness and health of kids by maintaining them active, therefore supplying distinguishable chances for growing and development. These enterprises besides encouraged parental engagement and continually invited parents to go to. When questioning with Child X as to whether her parents of all time visited, she articulated that her parents and many other parents ne’er got involved as they tended to be ‘busy ‘ . One set of barriers to rear engagement related to logistical restraints of clip, money, conveyance or kid attention. But it has besides been found that because parents in lower-socioeconomic households frequently have fewer old ages of instruction themselves and potentially harbour more negative experiences with schools ( Lareau and Horvat, 1999 ) . An component that School A should so hold considered, was that research has systematically shown that parental engagement in kids ‘s instruction makes a positive difference to pupils ‘ accomplishment. Parental engagement with kids from an early age has been found to compare with better results in footings of cognitive development and societal development more than parental business, instruction or income ( Sylva et al 2004 ) . Therefore, peculiarly for School A, plans and policies designed to advance parental school engagement in deprived communities in the hereafter may turn out effectual in supplying a sense of coaction for the kid. However, being sensitive to each community ‘s alone barriers and resources is besides of import for set uping and keeping effectual coactions between the single kid, their households and schools. In drumhead, the finest developmental surroundings for a kid consists of academic sweetening, infused with chances for physical, cognitive, societal, and emotional growing. The attacks of School A showed that through contemplation of a diverse context, pupils developed a greater understanding into their ain values and beliefs about teaching method. The school helped toward an apprehension that holistic demands of a kid can be met if schools create an ethos and conditions that support positive behavior for acquisition and for successful relationships. In add-on, they must supply an emotionally secure and safe environment and where appropriate, promote parental and community engagement. Traveling frontward, more attending demands to be paid to these non-cognitive results, such as kids ‘s wellbeing. For best pattern as a trainee instructor, the most important facets acquired for my personal development would be to try to promote regard, aid pupils find strengths in each other, dev elop consistence and support pupils to work for their personal best. After all, Every Child Matters. How to cite Vygotskys Social Development Theory Education Essay, Essay examples

Shiba Kōkan Example For Students

Shiba KÃ… kan Biography Outline1 Biography2 Key Ideas in Painting3 Famous paintings made by Shiba KÃ… kan Biography AndÃ…  KichijirÃ… , who is generally known as Shiba KÃ… kan or Kungaku, was a talented Japanese artist who managed to bring a significant number of elements from Western culture to his native land. KichijirÃ…  is traditionally related by the researchers to the activists of the Tokugawa period as he was the first to introduce oil painting, a traditional element for the Western style of art, to Japanese artists. First, KÃ… kan made a decision to study painting at KanÃ…  school, one of the most notable schools of Japanese painting. Here, he learned various unique Chinese techniques and traditional themes and decided to start his career as a woodblock printer, following the instructions of the influential Chinese artists and activists. It is important to mention that this significant person studied so-called Dutch studies and was highly interested in astronomy. Key Ideas in Painting At the very beginning of his career, the painter tended to follow Harunobu’s style; nonetheless, in the long run, he started to work under the influence of Western realistic tendencies and apply more and more elements of shading technique and elements of perspective. By reading a number of Dutch materials, KichijirÃ…  managed to study copperplate engraving and become a master of oil paintings. What is more, Shiba KÃ… kan became the first, who was educated enough to make copperplate print, in this launching the new page in the art history of China and Japan. As a result, the main types of drawings were made as oil paintings, in this way, witnessing a strong influence of popular Western techniques. Some of the artists works are presented with realistic elements that are thoroughly described in a literary work â€Å"Dissertation on Western Painting† written by Shiba KÃ… kan. As well as many of his competitors, the painter liked to depict hulls, different plants, and other natural beauties, creating outstanding innovative artwork. Famous paintings made by Shiba KÃ… kan The most popular artworks made by Shiba KÃ… kan is â€Å"Girls watching the Moon at Shinagawa,† and â€Å"Woman.† In addition, it is necessary to mention â€Å"View on Mimeguri† as it is the first copper print work by the Japanese painter that is beautifully colored. Another popular work is â€Å"A meeting of Japan, China, and the West†, by Shiba KÃ… kan, where the artist describes a meeting of three different people who symbolize three different countries. These people, as well as other ordinary individuals, sit around the table and discuss some current issues. The other popular works include a pair of scrolls that are created in the style of SÃ…  Shiseki and a number of oil paintings. All these works are traditional to the Dutch school, and, in this way, show a great interest of the painter in its traditional elements. Some researchers define the paintings of the artist to be nothing but the unexpected wink as he provides a fresh look at the topics pr esented in the pictures. Thus, paintings by Shiba KÃ… kan set the tone for the whole new era in the history of art in China and Japan and lead it to a completely new era.