Question

Why financial analysts use cash flows prediction instead of accounting earnings prediction in estimating the NPV...

Why financial analysts use cash flows prediction instead of accounting earnings prediction in estimating the NPV of a project?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Why financial analysts use cash flows prediction instead of accounting earnings prediction in estimating the NPV...
Why financial analysts use cash flows prediction instead of accounting earnings prediction in estimating the NPV of a project?
Why financial analysts use cash flows prediction instead of accounting earnings prediction in estimating the NPV...
Why financial analysts use cash flows prediction instead of accounting earnings prediction in estimating the NPV of a project?
1- Why financial analysts use cash flows prediction instead of accounting earnings prediction in estimating the...
1- Why financial analysts use cash flows prediction instead of accounting earnings prediction in estimating the NPV of a project?
1. Calculating project cash flows: Why do we use forecasted incremental after-tax free cash flows instead...
1. Calculating project cash flows: Why do we use forecasted incremental after-tax free cash flows instead of forecasted accounting earnings in estimating the NPV of a project? 2. The FCF calculation: How do we calculate incremental after-tax free cash flows from forecasted earnings of a project? What are the common adjustment items? 3. The FCF calculation: How do we adjust for depreciation when we calculate incremental after-tax free cash flow from EBITDA? What is the intuition for the adjustment? 4....
A firm wants to start a project. A team of financial analysts estimated the following cash...
A firm wants to start a project. A team of financial analysts estimated the following cash flows year                  cash flow 0 -$100,000 1 55,000 2 43,000 3 45,000 Suppose that the discount rate (interest rate) is 12%. The NPV is
Specifically how are the problems with estimating the future cash flows of a corporation different from...
Specifically how are the problems with estimating the future cash flows of a corporation different from estimating the future cash flows of a capital budgeting project?
Economic income is considered to be a better predictor of future cash flows than accounting income...
Economic income is considered to be a better predictor of future cash flows than accounting income is. A technique used by security analysts to determine the degree of correlation between a firm’s accounting earnings and its true economic income is quality of earnings assessment. Required: Obtain an annual report for a large corporation and perform a quality of earnings assessment?
For the following cash flows, find the NPV and IRR for a project. Use a 12.5%...
For the following cash flows, find the NPV and IRR for a project. Use a 12.5% discount rate for the NPV. Year   Investment     Projected Cash Inflow    Projected Cash Outflow                  ($000)              ($000)                               ($000) 2015   $    18,546 2016                                  $44,550                             $52,250 2017                                  $54,256                            $54,892        2018                                  $62,025                             $58,000 2019                                  $68,000                             $61,258 2020                                  $74,555                             $66,598 2021                                  $78,562                             $71,964 2022                                  $82,365                             $77,125 2023                                  $86,879                             $83,124 2024                                  $90,125                             $88,654 2025                                  $96,526                             $92,000...
Net present value (NPV) Evaluating cash flows with the NPV method The net present value (NPV)...
Net present value (NPV) Evaluating cash flows with the NPV method The net present value (NPV) rule is considered one of the most common and preferred criteria that generally lead to good investment decisions. Consider this case: Suppose Blue Hamster Manufacturing Inc. is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $2,750,000. The project is expected to generate the following net cash flows: Year Cash Flow Year 1 $325,000 Year 2 $475,000 Year...
To prepare for this Discussion, assume that you have just estimated the cash flows and NPV...
To prepare for this Discussion, assume that you have just estimated the cash flows and NPV for a project your company is considering. Your estimated NPV was +$10. The CFO is not sure whether to accept or reject the project. Post an analysis of the feasibility of the project the CFO is considering based on estimated cash flows and NPV. In your analysis, answer the following: What type of analysis would you use to make a business case for or...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT