Question
How do I get the Net Present Value analysis of proposed strategy's new cash flow and EPS/EBIT analysis NOTE: To construct the first cash flow
How do I get the Net Present Value analysis of proposed strategy's new cash flow and EPS/EBIT analysis
NOTE: To construct the first cash flow (cf1) at the very minimum, the new revenue from your strategy(s) must be discounted back to the present value by calculating EBIT and that figure will be your cfn for each year. cf0 (initial cost of your strategy), cf1 (discounted cash flow first year), r (opportunity cost of capital, the rate of the next best alternative use of cash/debt/equity resources). Using this cash flow chart of McDonalds
Statement of Cash Flow
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities | |||
Net income | $ 4,529.3 | $ 4,757.8 | $ 5,585.9 |
Charges and credits: | |||
Depreciation and amortization | 1,555.7 | 1,644.5 | 1,585.1 |
Deferred income taxes | (1.4) | (90.7) | 25.2 |
Share-based compensation | 110 | 112.8 | 89.1 |
Other | 177.6 | 369.5 | 26.8 |
Changes in working capital items: | |||
Accounts receivable | (180.6) | 27 | 56.2 |
Inventories, prepaid expenses and other current assets | 44.9 | (4.9) | (44.4) |
Accounts payable | (15) | (74.7) | (60.7) |
Income taxes | (64.4) | 3.3 | (154.4) |
Other accrued liabilities | 383 | (14.3) | 11.9 |
Cash provided by operations | 6,539.1 | 6,730.3 | 7,120.7 |
Investing activities | |||
Capital expenditures | (1,813.9) | (2,583.4) | (2,824.7) |
Purchases of restaurant businesses | (140.6) | (170.5) | (181) |
Sales of restaurant businesses and property | 554.2 | 489.9 | 440.1 |
Other | (19.7) | (40.9) | (108.2) |
Cash used for investing activities | (1,420) | (2,304.9) | (2,673.8) |
Financing activities | |||
Net short-term borrowings | 589.7 | 510.4 | (186.5) |
Long-term financing issuances | 10,220 | 1,540.6 | 1,417.2 |
Long-term financing repayments | (1,054.5) | (548.1) | (695.4) |
Treasury stock purchases | (6,099.2) | (3,198.6) | (1,777.8) |
Common stock dividends | (3,230.3) | (3,216.1) | (3,114.6) |
Proceeds from stock option exercises | 317.2 | 235.4 | 233.3 |
Excess tax benefit on share-based compensation | 51.1 | 70.9 | 92.6 |
Other | (58.7) | (12.8) | (11.8) |
Cash provided by (used for) financing activities | 735.3 | (4,618.3) | (4,043) |
Effect of exchange rates on cash and equivalents | (246.8) | (527.9) | 58.7 |
Cash and equivalents increase (decrease) | 5,607.6 | (720.8) | 462.6 |
Cash and equivalents at beginning of year | 2,077.9 | 2,798.7 | 2,336.1 |
Cash and equivalents at end of year | 7,685.5 | 2,077.9 | 2,798.7 |
Supplemental cash flow disclosures | |||
Interest paid | 640.8 | 573.2 | 532.7 |
Income taxes paid | $ 1,985.4 | $ 2,388.3 | $ 2,546 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started