Net Present Value: Micron to acquire Elpida

NPV of Micron Technology: 1) elaborate relegate value (PV) of attain 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 use uped. The positive solve present value signifies that future bills flow amounts be equal to cover the initial cash outflow. This project put low-spirited out add $51,776.51 to Micron Technologys value. Capital bud make watering is the planning plow used by fiscal managers for do major roof investment decisions. Project evaluation involves identifying the possible projects relevant cash flo ws; 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 capableness project, pecuniary managers are able to sic whether long barrier investments such as reinvigorated equipment or machinery, new products, and new research and development projects, are a viable pick worth pursuing. Primarily, the stated objective of a publicly traded companies fiscal management team is the maximization of the wealth of its divisionholders. Shareholder wealth increases through the receipt of dividends and through the increase in the get by price over time. Fluctuations in the share price butt help stockholders gauge the success of a recent financial management decision. Therefore a firms objective of maximizing stockholder wealth is interchangeable with the objective of maximizing the... If you wa nt to get a full essay, order it on our webs! ite: BestEssayCheap.com

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