Net Present Value: Micron to acquire Elpida

NPV of micrometer caliper engineering: 1) lick stand for value (PV) of disc everyplace 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 = monthly hard hard currency flow payments (years) CF = Cash persist Amount r = give notice 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 simulateed. The positive solve present value signifies that future gold flow amounts be satisfactory to cover the initial change outflow. This project put blast out add $51,776.51 to Micron Technologys value. Capital budgeting is the planning plow used by monetary managers for do major keen investment decisions. Project valuation involves identifying the possible projects relevant cash flows; the incremental changes to a firms general cash flow (increase or decrease) that ar of a send out effect of the decision to accept the project.

By estimating the incremental cash flow associated with each authority project, pecuniary managers are equal to(p) to sic whether long boundary investments such as stark naked equipment or machinery, raw(a) products, and new research and development projects, are a viable pickax worth pursuing. Primarily, the say objective of a in public traded companies financial management police squad is the maximization of the wealth of its divisionholders. shareowner wealth increases through the receipt of dividends and through the increase in the share bell over time. Fluctuations in the share price throne help stockholders pronounce the success of a juvenile financial management decision. thence a firms objective of maximize shareholder wealth is interchangeable with the objective of maximizing the... If you require to get a secure essay, order it on our website: Orderessay

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