PENGANGGARAN MODAL

Summary

This video explains the concept of capital budgeting, focusing on evaluating the feasibility of investments through cash flow analysis. It covers initial cash flows, operational cash flows, and terminal cash flows, with practical examples using a laundry business investment. The script emphasizes how to calculate depreciation, operational profits, and terminal cash flows to determine whether an investment is profitable. The video also introduces formulas for calculating depreciation, operating cash flow, and terminal cash flow, offering insights into both equity and debt financing methods. This content is perfect for understanding the essentials of making informed investment decisions.

Takeaways

• 😀 Capital budgeting is a method to determine whether an investment is worthwhile and whether a project is likely to be profitable or not.
• 😀 The video breaks down capital budgeting into two main parts: cash flow and investment evaluation criteria. This video focuses on cash flow.
• 😀 Cash flows are categorized into three types: initial cash flow, operational cash flow, and terminal cash flow.
• 😀 Initial cash flow refers to the first outflow of funds for investments, such as purchasing machinery, including installation and setup costs.
• 😀 Operational cash flow is the net income generated from an investment, after subtracting operational costs like maintenance, labor, and other expenses.
• 😀 Depreciation is an important factor in calculating operational cash flow. It is calculated by subtracting the residual value of an asset from its purchase price, divided by its economic lifespan.
• 😀 Return on investment (ROI) can be calculated by adding net income, depreciation, and if applicable, interest expense, adjusted for taxes.
• 😀 For investments using a mix of equity and debt, the formula for operational cash flow includes interest costs adjusted for tax impact.
• 😀 Terminal cash flow occurs at the end of an investment's useful life and includes both the residual value of the asset and any remaining working capital.
• 😀 Residual value is the estimated selling price of an asset at the end of its useful life, and working capital refers to funds required to maintain operations until the project concludes.
• 😀 The video includes practical exercises on calculating cash flows, depreciation, and taxes, helping viewers understand the importance of these calculations in investment decisions.

Q & A

What is the main concept discussed in the video?

The video discusses the concept of capital budgeting, which is the process of evaluating investment opportunities to determine if they are financially viable and beneficial.

What is an example of an investment discussed in the video?

An example discussed is buying a washing machine for a laundry business. The investment is evaluated to determine whether it will generate enough cash flow to be profitable.

What are the three types of cash flow mentioned in the video?

The three types of cash flow are initial cash flow (initial investment), operational cash flow (revenues and expenses during the investment's life), and terminal cash flow (cash flow at the end of the investment's life).

What is 'initial cash flow'?

Initial cash flow is the first outflow of cash required to make an investment, such as the cost of purchasing the asset and any setup or installation expenses.

How is depreciation related to capital budgeting?

Depreciation is used to reduce the value of the asset over time for tax purposes. It is subtracted from the asset’s initial cost to calculate operational profits and cash flows.

What is 'operational cash flow'?

Operational cash flow is the cash generated from the business operations after deducting costs like maintenance and salaries, from the income generated by the investment.

How is operational profit calculated in the example given?

Operational profit is calculated by subtracting the ongoing operational costs (like detergent, utilities, and other expenses) from the income generated by the business (such as revenue from the laundry service).

What factors contribute to terminal cash flow?

Terminal cash flow consists of the residual value of the asset at the end of its useful life (residual value) and the working capital used for operational purposes.

What is meant by 'residual value' in capital budgeting?

Residual value refers to the estimated sale price of the asset at the end of its useful life, representing the remaining value after depreciation.

How do taxes affect operational cash flow?

Taxes affect operational cash flow because a portion of the profits generated by the business is paid as tax, reducing the amount of money available for reinvestment or distribution.