THE ROLE OF FINANCIAL MANAGEMENT - siputihganteng

THE ROLE OF FINANCIAL MANAGEMENT - siputihganteng

THE ROLE OF FINANCIAL MANAGEMENT Dr. H. Mustika Lukman Arief, SE, MM. . Apa itu manajemen keuangan.? Manajemen Keuangan meliputi semua aktivitas yang berhubungan dengan usaha mendapatkan dana yang dibutuhkan perusahaan serta mengggunakan dan/mengalokasikan dana tersebut secara efesien dan efektif guna mencapai tujuan perusahaan. Manajemen keuangan digunakan untuk menjawab pertanyaan: 1. What long-term investments should the firma engage in? 2. How can the firm raise the money for the required investments? 3. How much short-term cash flow

does a company need to pay its bills? Proses manajemen keuangan for-profit organization Laba bersih Keputusa Keputusa nn Investasi Investasi Laba ditahan Dividen Kebijakan Dividen Alternatif investasi? Penilaian investasi? pemilihan investasi? Inv. Jangka pendek Inv. Jangka panjang

Jangka pendek Keputusa (Hutang Lanca)Jumlah kebutuhan n dana? Pendanaa Jangka panjangSumber dana? n Modal sendiri: Struktur modal? Biaya modal? Laba ditahan Saham Hutang jk. pjg The Role of The Financial Manager Capital Budgeting decision decision to in tangible or intangible assets also called the investment decision

Financing decision raising money that the firm needs for its investments and operations Capital structure the mix of long term debt and equity financing Untuk kebijakan fungsi tersebut, ada 3 keputusan yang perlu diambil 1. Keputusan investasi 2. Keputusan Pendanaan 3. Kebijkan Dividen Masing-masing keputusan harus berorientasi pada pencapaian tujuan perusahaan Tujuan Perusahaan Dalam pengertian mikroekonomi disebut bahwa tujuan perusahaan adalah memaksimalkan keuntungan. Namun ditinjau dari sudut keuangan tujuan ini mengabaikan berbagai kerumitan yang ada

dalam praktek pengambilan keputusan sehari-hari Kelemahan Maksimalisasi Keuntungan: 1. Tidak mengaitkan besarnya keuntungan yang dihasilkan denga waktu perolehannya 2. Tidak memperhatikan masalah waktu dan ketidakpastian 3. Mengabikan lamanya waktu pengembalian 4. Mengabaikan beban modal yang harus dipikul pemegang saham Tujuan Perusahaan Tujuan perusahaan adalah memaksimalkan kekayaan pemegang saham dengan cara memaksimalkan nilai perusahaan Basic goal: Maximize stockholder value indikatornya - Firms value yang maksimal - Stock price yang maksimal Nilai perusahaan dicerminkan oleh harga pasar saham Mengapa harga pasar saham mencerminkan nilai perusahaan atau kekayaan pemegang saham? Tujuan manajemen Keuangan mempelajari dan memahami bagaimana upaya

perusahaan dalam memaksimalkan nilai perusahaannya (Value of the firm) memalui 3 macam keputusan yaitu: keputusan investasi, keputusan pendaaan, kebijakan dividen. Vf = f (I, F, D) Vf I F D value of the firm (nilai perusahaan) = Investment Decision = Financial Decision = Dividen Policy Decision = . The Objektive Function Maximime the Value of the firm Basic corporation financial decision 1. How do you allocate resources across competing uses?

2. How do you raise founds to finance the projects? 3. How much do you reinvest back into the business and how much do you return to you stockholders? The corporate financial toolbox Accounting stetement and ratio Present value Risk and return meodels Option pricing models Aksioma-aksioma yang diperlukan untuk memahami Manajemen Keuangan Aksioma 1 Keseimbangan risiko dan pengembalian (the risk-return tradeoff) Jangan menambahkan risiko kecuali mendapatkan kompensasi tambahan pendapatan Aksioma 2 Nilai waktu uang (time value of money)-uang

yang diterima ssekarang lebih berharga dari uang yang diterima kemudian Aksioma 3 Yang utama adalah uang kas-bukan besarnya laba Lanjutan Aksioma 4 Tambahan Arus Kas (Increment Cash Flow) satu-satunya pertambahan nilai yang dihitung Aksioma 5 Kondisi persaingan pasar-alasan kenapa sangat sulit mendapatkan laba yang luar biasa Aksioma 6 Pasar modal yang efesien-pasar yang bergerak cepat dan harga yang tepat

Masalah keagenan-manajer tidak akan bekerja bagi pemilik perusahaan jika tidak selaras dengan kepentingan mereka Aksioma 7 Aksioma 8 Aksioma 9 Perpajakan yang berdampak pada keputusan bisnis Tidak semua risiko sama, ada sebagian risiko yangd dapat didiversifikasi Aksioma 10 Melakukan sesuatu yang benar adalah perilaku yang etis, dan banyak dilema etika dalam manajemen keuangan What is a Corporation? Types of Corporations Public Companies Private Corporations Limited Liability Corporations (LLC)

Organizing a Business Types of Business Organizations Sole Proprietorships Partnerships Corporations Limited Liability Partnerships Organizing a Business Who owns the business? Sole proprietorship Partnership Corporation

The manager Partners Shareholders No Usually Unlimited Limited Are managers No and owners separate? What is the Unlimited owners liability?

Are the owner & No business taxed separately? No Yes Question 1. Why should a company concetrate primarily on wealth maximization instead of profit maximization? 2. What are the three types of financial management decisions? For each type of decision, give an example of the business transaction that would be relevant. 3. Firms often involve themselves in projects that do not result directly in profits: for example, IBM and Mobil Oil frequently support public television broadcast. Do these projects contradict the goal of maximization of shareholder wealth? Why or why not. Case In early 2001, Doc and Lyn McGee formed the McGee Company. The company produced a full line of cakes, and its specialties included chess cake, le,on pound cake,

and double-iced, double-chocolate cake. The couple formed the company as an outside interest, and both continued to marketing and distribution. With good product qualty and sound marketing plan, the company grew rapidly. In early 2006, the company was featured in a widely distributed entrepreneurial magazine. Later that year, the company was featured in Gourmet Desserts, sales exploded, and the company began receiving orders from all over the world. Because of the increased sales. Doc left his order job, followed shortly by lyn. The company hired additional workers to meet demand. Unfortunately, the fast growth experienced by the company led to cash flow and capacity problems. The company is currently producing as many cakes a possible with the assets it owns, but demand for its cakes is still growing. Further, the company has been approached by national supermarket chain with an proposal to put four of its cakes in all of the chains stores, and a national restaurant chain has contracted the company obout selling McGee cakes in its restaurants. The restaurant would sell the cakes without a brand name. Doc and Lyn have operated as a sole proprietorship. They have approached you to help manage direct the companys growth. Specifically, they have asked you to answer the following questions: 1. What are the advantages and disadvantages of changing the company organization from a sole proprietorship to an Limited Liabilities Company (LLC)? 2. What are the advantages and disdvantages of

changing the company organization from a sole proprietorship to a corporation? 3. Ulimately, what action would you recommend the company undertake? Why ? Financial Statement Analysis Financial Statement Analysis Financial analysis can be defined as the process of assessing the financial condition of a firm Basic Fianancial Statements Balanced Sheet The Income Statement The Balance Sheet Definition financial statements that show the value of the firmss assets and liabilities at a particular point in time (from an accounting perspective)

US Corporation Balance Sheet U.S. CORPORATION 2004 and 2005 Balance Sheets (S in Millions) Assets Current assets Cash Accoumts receivable Inventory Total Fixed assets Net plant and Equipment Total assets Liabilities and Owners Equity 2004 2005 current liabilities $ 104 $ 160 ccounts payable

455 988 notes payable 553 555 total $1.112 $1.403 Long-term debt $1,644 $2,756 2004 2005 $ 232 196 $ 428 $ 266 123

$ 389 $ 408 $ 454 600 1,320 $1,920 640 1,629 $2,269 $2,756 $3,112 $1,709 $3,112 Owners equity

Common stock and Paid-in surplus Retained earnigs Total Total liabilities and owners equty The Income Statement Definition Financial statement that shows the revenues, expenses, and net income of a firm over a period of time (from an accounting perspektive) US Corporation Income Statement U.S. CORPORATION 2005 Income Statement (S in Millions) Net sales Cost of goods sold Depreciation Earnings before interest and taxes

Interest paid Taxable income Taxes Net income Diviends Addition to retained earnings $1,509 750 65 $ 694 70 $ 624 212 $ 412 $ 103 309 Why Evaluate Financial Statements? Internal uses - Performance evaluation-compensation and comparison between divisions - Planning for the future-guide in estimating

future cash flows External uses - Creditors - Suppliers - Custolers - Stockholders Financial Ratio The principal analytical tool of the financial analyst is the financial ratio Financial ratios help us identify some of the financial strengths and weaknesses of a company The ratios give us a way of making meaningful comparisons of a firms financial data at different points in time and with other firms Categori of Financial Ratios

Short-term solvency or liquidity ratios Long-term solvency or financial leverage ratios Asset management or turnever ratios Profitability ratios Market value ratios Liquidity Ratios Current ratio = current assets current liabilities Quick ratio = current assets - inventorie s Current liabilitie s Cash ratio = cash + marketable securities Current liabilities Long-term solvency or financial leverage ratios Total debt ratio = total liabilities total assets Debt/equity ratio = Total debt equity

Equity multiplier = Total Assets equity Long term debt ratio = long term debt long term debt+equty Times interest earned = EBIT Interest payments Asset management or turnover ratios Receivable turnover ratio = Sales Receivable Days sales in receivable = 365 Receivables turnover

Inventory turnover ratio = cost of goods sold Inventory Days sales in inventory = inventory Cost of goods sold/365 Asset management or turnover ratios Fixed asset turnover ratio = Total asset turn over= Sales Net fixed assets Sales Total assets NWC Turnover = Sales/NCW Net working capital (NCW) = CA - CL

Profitability ratios Net profit margin = net income Sales Return on asset (ROA) = Return on equity = net Income Total net income Total equity Market value ratios PE Ratio = Price per share/Earnings per share Market-to-book ratio = market value per sgare/book value per share Sample Balance Sheet

Numbers in millions 2008 2007 2008 2007 Cash 696 58 A/P 307 303 A/R 956

992 N/P 26 119 Inventori 604 625 Other CL Total CL 1,662 1,995 1,352 1,775 843 1,091

Total CA 2,256 1,675 LT Debt Net FA 3,138 3,358 Total Equty 2,556 2,167 Total Asset 5,394 5,033 Total Liab.

& Equity 5,394 5,033 Sample Income Statement Numbers in millions, except EPS & DPS Revenues Ost of Goods Sold Expenses Depreciation EBIT Interest Expense Taxable income Taxes Net Income EPS Dividends per share 5,000 2,006

1,740 116 1,138 7 1,131 442 689 3.61 1.08 Liquidity Ratios 1. Current Ratio = CA/CL 1. Current Ratio = CA/CL - 2256/1995= 1.13 times - 2256/1995= 1.13 times 2. Quick Ratio = (CA-Inventory)/CL 2. Quick Ratio = (CA-Inventory)/CL - (2256-604)/1995 = 83 times - (2256-604)/1995 = 83 times 3. Cash Ratio = Cash/CL 3. Cash Ratio = Cash/CL -696/1995 = 35 times -696/1995 = 35 times

Long-term Solvency ratios Total Debt Ratio = (TA TE)/ TA - (5394 2556)/5394=52.61% Debt/Equity = TD/TE - (5394-2556)/2556= 1.11 times Equity Multiplier = TA/TE = 1+D/E - 1=1.11= 2.11 Long-term debt ratio = LTD/(LTD=TE) - 843/(843=2556)= 24.80% Times Interest Earned= EBIT/Interest - 1138/7= 162.57 times Asset management or turnover ratios Computing Receivables ratios Receivables Turnover= Sales/Accounts= Receivable - 5000/956= 5. 23 times Days Sales in receivables = 365/ Receivales Turnover - 365/5.23= 70 days Asset management or turnover ratios

Computing Inventory ratios Inventory Turnover = Cost of Goods Sold/Inventory - 2006/301= 6.66 times Days Sales in Inventory = 365/Inventory Turnover - 365/6.66 = 55 days Asset management or turnover ratios Computing Inventory ratios Total Asset Turnover= sales/Total Assets - 5000/5394= 93 - it is not unusual for TAT <1, especially if a firm has a large amount of fixed assets NWC Turnover = Sales/NWC - 5000/(2256-1995)= 19.16 times Fixed Asset Turnover= Sales/NFA - 5000/3138= 1.59 times Profitability Measures Profit Margin= Net Income/Sales - 689/5000= 13.78% Return on Assets (ROA) = Net Income/Total

Assets - 689/5394 = 12.77% Return on Equity (REO) = Net Income/Total Equty - 689/2556= 26.96% Computing Market Value Measures Market Price = $ 87.65 per share Shares outstanding = 190.9 million PER ratio = Price per share/Earnings per share - 87.65/3.61 = 24.28 times Market-to-book ratio = market value per share/book value per share - 87.65/ (2556/190.9) = 6.56 times Harley-Davidson, Inc. Ratio Analysis 1. Liquidity ratios Current ratio Acid-test ratio Cash ratio 2. Financial leverage ratio Total Debt ratio

Debt/Equity ratio Equity multiplier Long term debt ratio Time interest earned 3. Turnover ratio Total assets turnover Account receivable turnover Inventory turnover Fixed assets turnover 4. Profitability ratios Net profit margin Return on Assets Return on Equity 2002 2003 1.13 83 35 Average industries 1,5

1,06 50 52.61% 1.11 2.11 24.80% 162.57 48% 98 2.01 20.04% 154.46 93 5.23 6.66 1.59 1.2 8.11 7.05

1.66 13.78% 12.77% 26.96% 14.04% 16.86% 35.56% Using the DuPont Identity ROE = PM * TAT * EM ROE = Net Income/sales x sales/assets x assets/Equity - Profit margin is a measure of the firms operating efficiensy - how well does it control costs - total asset turnover is a measure of the firms asset use efficiency-how well does it manage its assets - Equity multiplier nis a meausre of the firms financial leverage Expanded Dupont AnalysisAeropostale data Balance Sheet Data income Statement Data

- cash= 138,356 - Sales= 734,868 - inventory= 61,807 - COGS+ 505,152 - other CA = 12,284 - SG&A = 141,520 - fixed assets = 94, 601 - interest = (760) - equity = 185, 640 - taxes = 34, 702 Computations Computations - TA = 307,048 - NI= 54,254 - TAT = 2. 393 - PM= 7,383% - EM = 1.654 - ROA= 17.668% - ROE= 29.223% Aeropostale Expanded DuPont Chart ROE = 29.22% 17,668

11,654 PM= 7,383% NI=54,254 Sales= 680,614 TAT=2,393 Sales=734,868 TC=734,868 COGS= 505, 152 SG&A= 141,520 Interest= (760) Taxes= 34,702

Sales=734,868 Fixed Assets=94601 Cash= 138,356 Other CA=12,284 TA=307,048 Current Assets= 212,447 Inventory= 61,807 . ROE = net income sales x sales assets

x assets equty = 54,254 x 734, 868 x 307, 048 734,868 307,048 185, 640 = 07383 x 2.3933 x 1.6540 = 29.2% As we study the figure, we quickly see that improvement in the ROE can common in one or more of four ways: 1. Increase sales without a disproportionate increase in cost and expenses 2. Reduce COSGS or operating expences 3. Increase the sales relative to the asset base, either by increasing sales or by reducing the amounts invesred in company assets. From our earlier exammination of Harley-Davidson, we learned that the firm had excessive account receivables and fixed assets. Thus management need to reduce these assets to the lowest in the return on which would in turn result in an increase in the return on assets and then the return on equity 4. Increase the use of debt relative to equity, but only to the

extent tha it does not unduly jeopardize the firms financial position. Limitations of ratio analysis 1. It is sometimes diffcult to identify the industry category to which a firm belongs when the firm enganges in multiple line of business 2. Published industry averages are only approximations and provide the user with general guidelines rather than scientifically determoned averages of the ratios of all or even a representative sample of the firms within an industry 3. Accounting practice differ widely among firms and can lead to differences in computed ratio 4. An industry average may not provide a desirable target ratio or norm 5. Many firm experience seasonality in their operation Case Chris was recently hired by S&S Air, Inc., to assist the company with its financial planning and to evaluate the companys performance. Chris graduated from college five years ago with a finance degree. He has been employed in the finance departement of a fortune 500 company since then.

S&S Air was founded 10 years ago by friends Mark Sexton and Todd Story. The company has manufactured and light airplanes this period, and the companys products have received high reviews for safety and reliability. The company has a niche market in that it sells primarily to individuals who own and fly their own airplanes. The company has two models; the birdie, which sells for $53,000, and the Eagle, which sells for $78,000.0 . Although the company manufactures aircraft, its operations are different from commercial aircraft companies S&S Air builds aircraft to oredr. By using prefabricated parts, the company can complete the manufacture of an airplane in only five weeks. The company also receives a deposit on each order, as well as another partial payment before the order is complete. In contras, a commersial air plane may take one and one-half to two years to manufacture once the order is placed Mark and Todd have provide the following financial statements. Chris has gathered the industry ratios for the light airplane manufacturing industry. Sample Income Statement $21,785,300

Revenues Cost of of Goods Sold 15,874,700 Expenses 2,762,500 Depreciation 976,200 EBIT 2,171,900 Interest Expense 341,600 Taxable Income

1,830,300 Taxes 732,120 Net Income Dividends Add to retained earning 1,098,180 $439,272 658,908 Sample Balance Sheet 2006 Cash A/R Inventory 2006

$315,000 A/P 506,000 $635,000 740,800 N/P 1,450,000 Total CA Net FA Total Assets $1,561,800 Total CL 11,516,000 LT Debt Common stock 13,077,800 R/E Total Liab. & Equity 2,085,000 3,800,000 250,000 6,942,800 13,077,800

Light Airplane Industri ratios Lower Median Upper 1 Current ratio 0.50 1.43 1.89 2 Quick ratio 0.21

0.38 0.62 3 Cash ratio 0.08 0.21 0.39 4 Total Assets turnover 0.68 0.85

1.38 5 Inventory turnover 4.89 6.85 10.89 6 Receivables turnover 6.27 9.82 14.11 7

Total debt 0.44 0.52 0.61 8 Debt-Equity ratio 0.79 1.08 1.56 9 Equity multiplier

1.79 2.08 2.56 10 Time interest earned 5.18 8.06 9.83 11 Profit margin 4.05% 6.98%

9.87% 12 Return on assets 6.05% 10.53% 13.21% 13 Return on equity (ROE) 9.93% 16.54% 26.15%

Question 1. Using the financial statements provided for S&S Air, calculate each of the ratios listed in the table for the light aircraft industry. 2. Compare the performance of S&S Air to the industry, for each ratio, comment on why it might be viewed as positive or negative relative to the industry. How do you think S&S Airs ratio would compare to industry average? TIME VALUE OF MONEY TIME VALUE OF MONEY Future Value-Taking an amout and finding its value at sometime in the future Present Value-Taking an anmout from sometime in the future and finding its value today. Future Values Future Value Amount to which an invenstement will grow after earning interest Compound Interest Interest earned on interest.

Simple Interest Intrest earned only on the original investment. Future Values Example Simple Interest Interest earned at a rate of 6% for five years on a principal balance of $100 Today 1 2 Interest earned Value 100 6 6 6 6 6 106 112 118 124 130 Value at the end of year 5 =$130 Future Years 3 4 5

Future Values Example Compound Interest Interest earned at a rate of 6% for five years on the previous years balance Today 1 2 Interest earned Value 100 6 6.36 106 112.36 119.10 Future Years 3 4 5

6.74 7.15 126.25 133.82 Value at the end of year 5 =$133.82 7.57 Future Values FV = $100x(1+r)t Example-FV 1. What is the future value of$100 if interest is compounded annually at a rate 6% for five years? FV = $100 x (1+.06)5 = $133.82 2. What is the future value of $100 invested for five years at a nominal interest rate 12%, compounded continuosly? Compounding Periods Compounding an investment m times a years for T years provides for future value of wealth: FV = Co for example, if you $50 for years at 12% compounded semi-annually, your

investment will grow to FV = 6 =$70.93 Effective Interest Rates reff= (1+r/m)m- 1 2 Reff= (1+0,12/2) - 1 = 12,36% Continuous Compounding : reff = e m -1 Reff = (2,71828)0,12- 1 = 12,75% Dampak dari periode pemajemukan yang berbeda atas nilai masa depan $1.000, diinvestasikan dengan tingkat bunga nominal 8%

Jumlah Periode Pemajemukan Future value pada akhir 1 th Tingkat bunga tahunan efektif $1.000 Tahunan $1.080,00 8,00% $1.000 Semi tahunan

$1.081,60 8,16% $1.000 4 bulanan $1.082,43 8,24% $1.000 Bulanan $1.083,00 8,30% $1.000 Harian

$1.083,28 8,32% $1.000 Berkelanjutan $1.083,29 8,33% How Long is the wait? If we deposit $5,000 today in an account paying 10% how long does it take to grow to $10,000? FV = Co x (1+r)T (1.10)T = $10,000=$5,000x(1.10)T

$10,000 = 2 $5,000 ln(1.10)T = ln 2 T= ln 2 = 0.6931 = 7,27 years ln (1.10) 0.0953 What Rate Is Enough? Assume the total cost of a college education will be $50,000 when your child enters college in 12 years. You have $50,000 to invest today. What rate of interest must you earn on your investment to cover the cost of your childs education ? About 21.15% FV = Co x (1+r)T $50,000=$5,000 x (1.r)12 (1.r)12 =$50,000=10 (1+r)101/12

$5,000 r =101/12 = 1 = 1.2115 = 1 = 2115 . What is the future value three years hence of $1.000 invested in an account with a stated annual interest rate of 8% a. b. c. d. Compounded annually Compounded semiannually Compounded monthly Why does the future value increase as the Compounding period shortens Present Values Discount factor Present Value

Present value of a $1 future payment. Value today of a future cash flow. Discount Rate Interest rate used to compute prent values of future cash flows. TIMES VALUE OF MONEY (APPLICATIONS) The PV formula has many application, you can solve for the remaining variable. PV = FV x 1

(1+r)t What is the present value of $ 100 to be received in 3 years if the appropriate interest rate 1s 10%, 15%, and 20% PV = $100 x 1/(1,1)3 = $75,13 PV = $100 x 1/(1,15)3 = $65,75 PV = $100 x 1/(1,20)3 = $57,87 PV of Multiple cash Flows Example your auto dealer gives you the choice to pay $15,500 cash now, or make three payments: $8,000 now and $4,000 at the end of the flowwing two years. If your cost of money is 8% wich do you prefer? Immediate payment 8,000.00 PV 1 = 4,000 = 3,703.70 (1+.08)1 PV 2= 4,000 = 3,429.36 (1+.8)2 Total PV = $15,133.06 .

Example you are selling your house. The Smith have offered you $115.000. they will pay you immediately. The Joneses have offered you $150.000, but the cannot pay you until theree years from today. The interest rate is 10 percent. Which offer should you choose? you have the opportunity to make invesment that cost $900.000. if you make the investment now, you will receive $120.000 and three years from today, respectively. The appropriate discount rate for this invesment is 12%. Should you make invesment? You are given three invesment alternatives to anlyze. The cach flows from these three invesments are follows: END OF YEAR 1 A B C $5,000

$1,000 $10,000 2 $5,000 $3,000 $10,000 3 $5,000 $5,000 $10,000 4 -$15,000

$10,000 $10,000 5 $15,000 $10,000 -$40,000 What is the present value of each of these three invesments if 10 percent is the appropriate discount rate? Perpetuities & Annuities Annuity = Equally spaced level stream of cash flows for a limited period of time. Perpetuity = A stream of level cash payments that never ends. Annuities

FV of Annuity Formula FVAN = C X (1 + r)t - 1 r C = cash payment r = interest rate t = Number of years cash payment is received Annuities Example future Value of annual payments You plan to save $4,000 every year for 20 years and then retire. Given a 10% rate of interest, what will be the FV of your retirement account? FVAN = 4.000 x (1 + 0,10)20 - 1 0,10 FVAN = $229,100 Annuities PV of Annuity Formula PVAN = C x (1 1/(1+r)t r

C = cash payment r = interest rate t = Number of years cash payment is received Annuities Example Annuities you are purchasing a car. Your are scheduled to make 3 annual instllments of $4,000 per year. Given a rate of interest of 10%, what is the price you are paying for the car (i.e. what is the PV) PVAN = 4.00 x 1- 1/(1+0,1)3 0,1 PVAN = $9.947,41 Annuity: Example Your insurance agent offers to sell you an annuity. It will pay you $400 per for five years. Your requred rate of return is 7%. How much will you be willing to pay? 0 1 2 3 4 5 6

.. ... .... ... 400 400 400 400 400 PV = = $1,640.08 Annuity: Example Your insurance agent offers to sell you an annuity. It will pay you $400 per for five years beginning of each years. Your requred rate of return is 7%. How much will you be willing to pay? 0 1 2 3 4 5 6 ... .. .. .. ..... 400

400 400 400 400 PAVN = C x (1 1/(1+r)t x (1 + r) r PV = = = $1,724.85 Your company is considering leasing $120.000 piece of equipment for the next 10 years. The annual lease payments of $15.000 are due beginning of each year. The buy the equipment for $25.000 at the end of the leasing period. Should your company accept the lease offer if appropriate discount rate is 8 percent a year? Perpetuities PV of Perpetuity Formula PV = c r

c = cash payment r = interest rate Perpetuities & Annuities Example Annuities in order to create an endowment, which pays $100,000 per year, forever, how much money must be set aside today in the rate of interest is 10% ? PV = 100,000= $1,000,000 10 The market interest rate is 15 percent. What is the price of a consol bond that pays $120 annually ? Perpetuities & Annuities Example continued if the first perpetuity payment will not be received until three years from today, how much money needs to be set aside today? PV = 1,000,000 = $751,315 (1+.10)3 Inflation Inflation Rate at which prices as a whole are

increasing. Nominal Interest Rate Rate at which money inveted grows. Real Interest Rate Rate at which the purchasing power of an investment increases. Inflation 1 + real interest rate = 1+nominal interest rate 1+inflation rate Approximation formula Real int. rate = nominal int. rate inflation rate Questions and Problem 1. Ellen, a sophmore mechanical engineering student, receives a call from an insurance agent, who believes that Ellen is an older woman ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her an annual fixed income. The annuities are as fllows: Annuity Initial payment into annuity (At t=0)

Amount of money received year Duration of Annuity (Years) A $50,000 $8,500 12 B $60,000 $7,000 25

C $70,000 $8,000 20 If Ellen could earn 12 percent on her money by placing it in savings account, should she place it instead in any of the annuities? Which ones, if any? Why ? Questions and Problem 2. You are triying to plan for retirement in 10 years and currently you have $150,000 in savings account and $250,000 in stock. In addition, you plan to add to your savings by depositing $8,000 per year in your saving account at the end of each of the next five years and then $10,000 per year at the end of each year for the final five years until retirement. a. Assumsing your savings account returns 8 percent compounded annually and your investment in stocks will return 12 percent compounded annually, how much will you have at the end of 10 years? (ignore taxes) b. if you expect to live 20 years after you retire, and at a retirement you deposit all of your savings in a bank account paying 11 percent, how

much can you withdraw each year after retirement (20 equal withdrawls beginning one year after you retire) to end up with zerobalance at death? . CAPITAL BUDGETING What Is Capital Budgeting Capital budgeting involves the decision making process with respect to investment in fixed assets; specifically, it involves measuring the incremental cash flows associated with investment proposals and evaluating the attractiveness of these cash flows relative to the projects costs Capital budgeting is decision process that managers use to identify those projects that add to the firms value, and as such it is perhaps the most important task faced by financial managers and their staffs.

First, a firms capital budgeting decisions define its strategic direction, because moves into new products, services, or markets must be preceded by capital expenditures. Second, the results of capital budgeting decisions continue for many years Thied, poor capital budgeting can have serious finacial consequences. Projects Classifications 1. 2. 3. 4. 5.

6. 7. Replacement Worn out equipment Replacement Reduce costs Expansian of existing produkcts or markets Expansion into new products or markets Safety/environmental projects Recearch and Developments Other JENIS-JENIS PROYEK Independent Projects: if the cash flows of one are unaffected by the acceptance of the other. Acceptance or rejection of project depends upon merits of project compared to decision criteria. Mutualli Exclusive Prjocts: if the cash flows of one can be adversely impacted by the acceptance of the other.

The acceptance of one project excludes the possibility of accepting the other(s) An Example of Mutally Exclusive Projects BRIDGE vs BOAT to get products across a river Some Alternative Invesment Rules Payback Period Discounted Payback Net Present Value (NPV) Profitability Index Internal Rate of Return Modified internal rate of Return (MIRR)

Payback Period How long does it take to get the initial cost back in a nominal sense? Computation Estimate the cash flows Subtract the future cash flows from the initial cost until the initial investment has been recovered Decision Rule - Accept if the payback period is less than some preset limit Net Cash Flows for Projects S and L Project S : 0 1 2 3 4 -1,000500 400 300 100 Project L : 0 1 2 3 4 -1,000100 300 400 600 Payback S = 2 + $100/$300= 2.33 years Payback L= 3 + $200/$600 = 3.33 years

Advantages and Disadvantages of Payback Advantages Disadvantages Easy ro undersand ignore the time value of money adjusts for uncertainly of later cash flows requres an arbitrary cutoff point Biased towards liquidity Ignores cash flows beyond the cutoff date Biased againt long-term projects, such as recearch and development, and new projects

Discounted Payback Period Compute the present value of each cash flow and then determinane how long it takes to Payback on a discounted basis Compare to a specified required period Decision Rule Accept the project if it pays back on a discounted basis within the specified time Projects S and L: Discounted Payback Period Project S : 0 1 2 3 4 -1,000 500 400 300 100 Disc. NCF (at 10%) -1,000 455 331 225 Project L : 0 1 2 3 4 -1,000 100 300 400 600 Disc. NCF (at 10%) -1,000 91248 301 410 Payback S = 2 + $100/$300= 2.33 years Payback L= 3 + $200/$400 = 3.33 years 68

Net Present Value Net Present Value Present value of cash flows minus initial invesments Opportunity Cost of Capital Expected rate of return given up by investing in a project NPV= -Co + C + C +.+ C = -Co + (1+r) (1+r)2 (1+r)N C (1+r)T The Net Present Value Method : Equal to or greater than zero Accept the inevestment Net Present Value

Less than zero Minimum Acceptance Criteria: Accept if NPV > O Ranking Criteria: Choose the highest NPV Reject the investment Net Present Value (NPV) NPV = -1,000 + 500 (1+0,10)1 Cash Flows -1000 (1+0,10)2 0 500 454.55 330.58 225.39

68.30 Net Present Value 400 78.82 (1+0,10)3 1 400 300 (1+0,10)4 =78.82 2 300 100 3 100

4 NPV Decision Rule A positive NPV means that the project is expected to add value to the firm and will therefore increase the wealth of the owners. Since our goal is to increase owner wealth, NPV is a direct measure of how well this project will meet our goal. Goo Attributes of the NPV Rule 1. Uses csh flows 2. Uses ALL cash flows of the project 3. Discounts ALL cash flows properly Reinvestment assumption: the NPV rule assumes that all cash flows can be reinvested at the discount rate. Profitability Index (PI) PI = Total PV of Future Cash Flows Initial Investment Pls = $1,078.82/$1,000=1.079

Minimum Acceptance Criteria: Accept if PI > 1 Ranking Criteria: select alternative with highest PI Profitability Index (PI) Disadvantages problem with mutually exclusive invesments Advantages: maybe usesful when available invesment funds

are limited Easy to undersantand and communicate Correct decision when evaluating independent projects Internal Rate of Return (IRR) Definition : IRR is the return that makes the NPV= 0 Decision Rule: Accept the project if the IRR is greater than the required return CFo + CF1 (1+IRR) - 1,000 + 500 (1+r) IRRs = 14.5%

+ CF2 ++ CFn (1+0,10)2 + 400 (1+r)2 = 0 (1+IRR)n + 300 (1+r)3 + (1+r)4

100 + = 0 CFo + CF1 + CF2 ++ CFn (1+IRR) (1+0,10)2 (1+IRR)n - 1,000 + 100 + 300 (1+r) (1+r)2 IRRL = 14.8% + 400 (1+r)3 = 0 + 600 + = 0

(1+r)4 NPV Vs. IRR NPV and IRR will generally give us the same decision Exceptions non-conventional cash flows cash flow signs change more than once Mutually exclusive projects initial invesments are substantially different Timing of cash flows is substantially different Example - Non conventional Cash flows Suppoese an investment will cost $90,000 initially and will generate the following cash flows:

Year 1: 132,000 Year 2: 100,000 Year 3:-150,000 The required return is 15% Should we accept or reject the project? IRR and Mutually Exclusive Projects Mutually exclusive projects If you choose one, you cant choose the other Example: you can choose to attend graduate scholl at either Havard or Standard, but not both Intuitively you would use the following decision rules:

NPV choose the project with the higher NPV IRR - choose the project with the higher IRR Example With Mutually Exclusive Projects Period Project A Project B 0 -500 -400 1 325 325

2 325 200 IRR 19.43% 22.17% NPV 64.05 The required return for both projects is 10% Which project should 60.74 you accept and why?

Conflicts Between NPV and IRR NPV directly measures the increase in value to the firm Whenever there is a conflict between NPV and another decision rule, you should always use NPV IRR is unrealiable in the following situations non-conventaional cash flows Mutually exclusive projects Managers like ratesprefer IRR to NPV comparisons. Can we give them Yes, MIRR is the discount rate that causes the PV of a projects terminal value (TV) to equal the PV of cost. TV is found by compounding inflows at WACC Thus, MIRR assumes cash inflow are reinvested at WACC.

PV of costs= terminal Value (1 + MIRR) Modified Internal Rate of Return . Your division is considering two invesment projects: Year Project A Project B 0 -$25 -$25 1 5

20 2 10 10 3 15 8 4 20 6 a. Compute the payback, discounted payback, NPV, PI, IRR, and MIRR for the following two projects. Assume the required return is 10%

b. If two project mutually exclusive and COC 5%, which project should the firm undertake? c. If two project mually eclusive and COC 15%, which project should the firm undertake? d. What is the crossover rate? Case Your first assigment in your new position as assistant financial analyst at Caledonia Products is to evaluate two new capital-budgeting proposals. Because this is your first assigment, you have been asked not only to provide a recommendation, but also to respond to a number budgeting process. This is a standard procedure for all new financial analysts at Caledonia and will serve to determine whether you are moved directly into the capitalbudgeting analysis departement or are provided with remedial training. The memorandum you received outlining your assgment follows: to : The New Financial Analyst from : Mr. V. Morrison, CEO, Caledonia Products RE: capital-budgeting analysis provide an evaluation of two proposed projects, both with five-year expected lives and identical initial outlays of $110,000. Both of these projects involeve addition to Caledonias highly successful Avalon product line, and as a result, the required rate of return on both projects has been established at 12 percent. The expected free cash flows from each project are as follows: Project A

Initial Outlay Project B -$110,000 -$110,000 Year 1 20,000 40,000 Year 2 30,000 40,000 Year 3 40,000

40,000 Year 4 50,000 40,000 Year 5 70,000 40,000 In evaluating these projects, please respond to the following quetsions: a. Why is the capital-budgeting process so important? b. Dtermine the payback, discounted payback, NPV, PI, IRR and MIRR, should they be accepted? c. What would happen to the NPV and PI, if the required rate of return increased? If the required rate of return decreased? d. How does a change in the required rate of return affect the projects IRR?

The Dilemma at Day-Pro the Day-Pro Chemical Corporation, established I 1995, has managed to earn a consistently high rate of return on its investments. The scret of its success has been strategic and timely development, manufacturing, and marketing of innovative chemical product that have been used in various industries. Currently, the management of the company is considering the manufacture of a thermosetting resin as packaging material for electronical products. The companys recearch an development teams have come up produce initially but would have greater economies of scale. At the initial presentation, the project leaders of both teams presented their cash flow projections and provided sufficient documentation in support of their proposals. However. Since the products are mutually exclusive, the firm can only fund one proposal. . In order to resolve this dilemma, Tim Palmer, the Assistant Treasurer, and a recent MBA from a prestigious mid-western university, has been assigned the task of analyzing the costs and benefits of the two proposals and presenting his findings to the board of directors. Tim knows that this will be an uphill task, since comes to financial concepts. The Boar has historically had

a strong preference for using rates of return as its decision criteria. On occasion it has also used the payback period approach to decide between competing projects. However, Tim is convinced that when net present value (NPV) method is least flawed and when used correctly will always add the most value to a companys wealth. . After obtaining the cash flow projections for each project (see Tables 1 & 2), and crunching out the numbers, Tim realizes that the hill is going to be steeper than he thought. The various capital budgeting techniques, when applied to the two series of cash flows, provide inconsistent results. The project with the higher NPV has a longer payback period, as a lower Accounting rate of Return (ARR) and Internal Rate of return (IRR). Tim scratches his head, wondering how can convince the Board that the IRR, ARR, and payback often lead to incorrect decisions. . The day-Pro Chemical Corporation, established I 1995, has managed to earn a consistently high rate of return on its invesments. The scret of its success has

been strategic aand timely development, manufacturing, and marketing of innovative chemical products that have been used in various industries. Currently, the management of the company is considering the manufacture of a thermosetting resin as packaging material for electronic products. The companys Recearch and Development teams have come up presentations and provided sufficient documentation in support of their proposals. However, since the products are mutually exclusive, the firm can only fund one proposal. in order to resolve this dilemma, Tim Palmer, the Assistant Treasurer, and a recent MBA from a presentigious mi-western university, has been assigned task of analyzing the costs and benefits of the two proposals be an uphill task, since the board members are not all on the same page when comes to financial concepts. . The Board has historically had a strong preference for using rates of return as its decision creteria. On occasion it has also used the payback period approach to decide between competing projects. Howerer, Tim is convinced that the net present value (NPV) method is least flawed and when used correctly will always add the most value to a companys wealth. after obtaining the cash flow projections for each project (see Table 1&2) and crunching out the numbers, Tim realizezs that the hill is going to be steeper to the two series of cash flows, provide inconsistent results. The

project with the higher NPV has a longer payback period, as well as a lower Accounting Rate of Return (ARR) and Internal Rate of Return (IRR). Tim scratches his head, wondering how he can convince the Board that the IRR, ARR, and payback Period can lead to incrorrect decision. . Syntetic Resin Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Net Income 150,000 200,000

300,000 450,000 500,000 Depreciation 200,000 200,000 200,000 200,000 200,000 Net cash flow (1000,000) 350,000 400,000 500,000

650,000 700,000 Epoxy Resin Year 0 Year 3 Year 4 Year 5 Year 1 Year 2 Net Income 440,000 240,000 140,000

40,000 40,000 Depreciation 160,000 160,000 160,000 160,000 160,000 600,000 400,000 300,000 200,000 200,000

Net cash flow (800,000) Questions 1. Calculate the payback period of each project. Expalin what argument Tim should make to shaow the payback period is not appropriate is this case. 2. Calculate the Discounted Payback Period (DPP)using 10% as the discount rate. Should the tim ask the board to use DPP as the deciding factor? Explain. 3. Calculate the two project IRR. How should Tim convince the Board that the NPV method is the way to go? 4. Explain how Tim can show that the Modified Internal Rate of Return (MIRR) is the more realistic measure to use in the case of mutually exclusive projects 5. Calculate the Profitability for each proposal. Can this measure help to solve the dilemma? Explain. . CAPITAL BUDGETING AND CASH FLOW ANALYSIS

PROSES PENGANGGARAN MODAL 1. Tentukan biaya proyek 2. Perkirakan aliranb kas yang diharapkan dari proyek, termasuk nilai akhir aktiva 3. Risiko dari lairan kas proyek harus dietimasi. (memakai distribusi probabilitas aliran kas) 4. Dengan mengetahui risiko dari proyek, manajemen harus menentukan biaya modal (cost of capital) yang tepat untuk mendiskon aliran kas proyek 5. Tentukan nilai sekarang aliran kas masuk yang diharapkan digunakan untuk memperkirakan nilai aktiva. 6. Terakhir, nilai sekarang dari lairan kas yang diharapkan dibandingkan dengan biayanya. HAL PENTING DALAM ESTIMASI ALIRAN KAS 1. Keputusan dalam capital budgeting harus didasarkan pada aliran kas setelah pajak. 2. Hanya memeperhatikan incremental cash flow yang relevan. 3. Memperhatikan aliran kas yang timbul karena keptusan investasi, aliran kas dari keputusan pendanaan tidak perlu diperhatikan (ex: bunga, cicilan, deviden)

4. Tidak memasukan sunk cost (biaya yang telah terjadi) 5. Opportunity cost harus diperhitungkan secara tepat dalam analis penganggaran modal. Project Cash Flows Initial outlay. This include the cost of the fixed assets associated with the project plus any initial invesment in net operating working capital, such as raw materials Opertaing cash flow. The operating cash flow is the net operating profit after taxes plus depreciation Terminal cash flow. At the end of the projects life. Usually generated from: salvage value of the fixed assets, adjusted for taxes if the assets are not sold at their book value, return of net operating working capital Project Cash Flows When deciding whether or not to make an invesment, we must first estimate the cash flows that the invesment will provide Generally, these cash flows can be categorized as follows:

the initial outlay (IO) operating cash Flows The terminal cash flows (TCF) Operating Cash flow Initial terminal Outlay cash flow 0 1 2 3 4 5 6 Sebagai manejer keuangan yang baru ditunjuk di Blooper Industries, Anda akan menganalisis sebuah proposal penambangan dan penjualan biji magnisium kelas satu yang langka. Proyek ini memerlukan investasi $10 juta. Setelah 5 tahun kandungan biji magnesium habis, metode penyusutan adalah garis lurus, dengan nilai buku pada kahir tahun menjadi nol. Pada tahun ke enam peralatan mungkin dapat dijual senilai $2 juta. Untuk itu perusahaan dikenal tagihan pajak pada tahun ke enam senilai 35%+ x $2= $0.70. sehingga arus kas bersih dari penjualan aktiva tahun ke enam adalah $2- $0.7= $1.3 juta. Ramalan modal kerja dari Blooper Industries adalah sbb: 0 Piutang

Persediaan M. kerja $0 1.500 1.500 1 $2.500 1.575 4.075 2 $2.625 1.654 4.279 3 $2.756 1.736 4.493 4

$2.894 1.823 4.717 5 $3.039 0 3.039 6 $0 0 0 Perusahaan memperkirakan mampu menjual 750.000 pon magnesium per tahun dengan harga $20, harga akan meningkat sesuai dengan tingklat inflasi, beban operasi diperkirakan sebesar 2/3 dari pendapatan. Tingkat inflasi 5%, dari tarif pajak 35%. Tentukan Cash Flows 0 1

2 3 4 5 A. Aktiva Tetap Investasi aset tetap -100.000 Penjualan asset tetap 21,758 Opportunity cost -150,000 150,000

Arus kas, investasi aset tetap -250,000 171,758 B. Modal Kerja Modal kerja 10,000 10,000 16,320 24,969 21,224 0 Perubahan modal kerja

10,000 0 6,320 8,649 -3745 -21,224 -10,000 0 -6,320 -8,649 3,745

21,224 100,000 163,200 249,696 212,242 129,892 Beban operasi 50,000 88,000 145,200 133,100 87,846

Depresiasi 20,000 32,000 19,200 11,520 11,520 Laba sebelum pajak 30,000 43,200 85,296 67,622

30,526 pajak 10,200 14,688 29,000 22,991 10,526 Laba setelah pajak 19,800 28,512 56,296 44,631

20,147 Arus kas dari operasi 39,800 60,512 75,496 56,151 31,667 39,800 54,192 66,847 59,896

224,649 Arus kas investasi modalkerja C. Operasi Pendapatan D. Penilaian Total arus kas proyek NPV (DF 12%) -260,000 5,475 Analisis Arus kas Proyek Penggantian PT Tekstil membeli mesin pintal 10 tahun yang lalu dengan $75.000. mesin tersebut memiliki usia ekonomis selama 15 tahun dan sisusutkan dengan metode garis lurus, tanpa nilai sisa. Jadi nilai buku mesin saar ini adalah $25.000. perusahaan merencangkan akan mengganti mesin lama dengan mesin baru. Mesin baru yang sejenis dapat dibeli dengan harga $120.000, dengan usia ekonomis 5 tahun, disusutkan dengan MACRS. Nilai sisa jika dijual rugi $15.000. pajak perusahaan 40%. Apabila penggantian itu dilakukan dapat menghemat biaya sebesar $50.000 per tahun. Buatlah estimasi cash flow selama 5

tahun. Apakah proyek layak dijalankan, bila biaya dana 20% Th 0 Penyusutan Nilai buku $120,000 1 20,00% x $120,000 = 24,000 2 32,00% x$120,000 = 38,400 $96,000 57,600 3 19,20% x $120,000 = 23,040

34,560 4 11,52% x $120,000 = 13,824 20,736 5 11,52% x $120,000 = 13,824 6,912 Tabel: Estimasi Arus Kerja keterangan Tahun 0 1

2 3 4 5 Initial cash flow Harga mesin baru Penjulan mesin lama Tax saving (40%x$15.000) -120.000 10.000 6.000 Operating Penghematan biaya Dep mesin baru Dep mesin lama Tambahan

penyusutan Laba sebelum pajak Pajak Laba bersih Operating cash flow 50.000 24.000 5.000 19.000 31.000 12.400 18.600 37.600 50.000 38.400 5.000 33.400 16.600 6.640 9.960 43.360

50.000 23.040 5.000 18.040 31.960 12.784 19.176 37.216 50.000 13.824 5.000 8.824 41.176 16.470 24.706 33.530 50.000 13.824 5.000 8.824

41.176 16.470 24.706 33.530 Terminla cash flow Nilai sisa mesin baru Proyeksi cash flow NPV (DF 20%) 6.912 -104.000 11,404 37.600 43.360 37.216 33.530 40.442

Soal Scoty Corporation pembuat komponen elektronik. Scoty mempertimbangkan untuk mengganti satu mesin perakit yang dioperasikan dengan tangan dengan mesin baru nyang otomatis. Mesin perakit tersebut dibeli 5 thaun yang lalu dengan harga $50,000, umur ekonomis 10 tahun. Harga mesin baru $60,000, usia ekonomis 5 tahun, tanpa nilai sisa Situasi sekarang (mesin perakit manual) Gaji operator Situasi yang diajukan (mesin perakit otomatis) $25,000 Gaji operator 0 Biaya perawatan/thn 2,000

Biaya pemasangan $3,000 Biaya kerusakan/thn 6,000 Biaya pengiriman $3,000 Depresiasi tahunan 5,000 Biaya perawatan/thn $3,000 Nilai jual sekarang

5,000 Biaya kerusakan/thn $3,000 34% Usia yang diharapkan 5 tahun Tingkat pajak Nilai jual akhir tahun ke 5 20,000 Buatlah estimasi cash flows, apakah proyek layak dijlankan bila biaya dana 16% Tabel: Estimasi Arus Kas Keterangan

Tahun 0 Initial cash Flow 1. Harga mesin baru ditambha pemasangan & pengiriman 2. Penjualan mesin lama 3. Tax saving 34%(25,000-5.000) 1 2 3 4 5 25.000 3,000 13.200

5.000 8,200 1,000 18,800 6,392 12,408 20,608 25.000 3,000 13.200 5.000 8,200 1,000 18,800 6,392 12,408 20,608 25.000 3,000 13.200 5.000

8,200 1,000 18,800 6,392 12,408 20,608 25.000 3,000 13.200 5.000 8,200 1,000 18,800 6,392 12,408 20,608 25.000 3,000 13.200 5.000 8,200

1,000 18,800 6,392 12,408 20,608 20,608 20,608 20,608 20,608 33,808 -66.000 5.000 6.800 Operating cash flow 4. Pengurangan gaji operator 5. Pengurangan biaya kerusakan

6. Dep Mesin baru 7. Dep mesin lama 8. Tambahan penyusutan 9. Tambahan biaya perawatan 10. EBT (4+5-8-9) 11. Pajak (34%) 12. Laba bersih 13. Operating cash flow (12=8) Terminal cash flow 14. Nilai jual mesin baru 15. Pajak: 34%(20,000-0) Proyeksi cash flow NPV (DF 16%) -54,200 19,561 Problem PT. A sedang mempertimbangkan pembelian panggangan baru yang hemat energi. Panggangan ini berharga $40,000 dan akan disusutkan menurut skedul MACRS 3 tahun. Panggangan

ini akan ndijual sebagai besi tua setelah 3 tahun senilai $10,000. panggangan ini tidak berdampak pada penerimaan tapi akan menghemat biaya energi sebesar $20,000. tingkat pajak 35%, dan biaya modal 12%. Apakah panggangan ini seharusnya dibeli? The Unequal Lives Problem There are two ways to correctly deal with the unequal lives problem The replacement chain approach The equivalent annual annuity approach Misalkan Anda harus memilih di antara 2 mesin, yang umurnya berbeda, tapi memiliki kapasitas iidentik dan melakukan pekerjaan yang persis sama. Mesin A Mesin B 0

Biaya (ribuan dolar) 1 2 3 PV pada 6% 15 10 4 6 $25.69 $21.00 4 6 4 Mesin mana yang sebaiknya dipilih ?

Memilih di antara 2 proyek yang mutually exclusive Tahun 0 Proyek A Proyek B 0 -$4.000 -$2.000 1 2 800 1.400 700 1.300

3 1.300 1.200 4 5 6 1.200 1.100 1.000 1 2 3 4

NPV B1 =612,32 PV =460.03 1.072,35 5 Jika discount rate = 10% NPV proyek A = $928,11 NPV proyek B = $612,32 EAA untuk proyek A = $213,11 EAA untuk proyek B = $246,21 6 NPV B2=612,32 Metode Penyusutan Metode garis lurus: metode penyusutan yang mengalokasikan biaya secara merata selama usia penyusutan aktiva Sum of years digit method: metode penyusutan dengan penjumlahan angka tahunan Double decline balance method: dengan formulasi 2(1/n) NBV

MACRS : dengan menggunakan tabel tarif MACRS berikut: Tahun Kelas Properti Pemulihan 3 tahun 5 tahun 7 tahun 10 tahun 1 33,33% 20,00%

14,29% 10,00% 2 44,45% 32,00% 24,49 18,00% 3 14,81% 19,20 17,49% 14,40%

4 7,41% 11,52% 12,49% 11,52% 5 11,52% 8,93% 9,22% 6 5,76%

8,93% 7,37% 7 6,55% 8 6,55% 9 6,55% 10 6,55% 11 3,28%

Total 100,00% 100,00% 100,00% 100,00% Capital Rationing (limit set on the amount of funds available for investment) Firms should implement all positive NPV projects this will maximize shareholder wealth Firms often limi the projects that are considerations Capital Rationing: process of limiting

availability of capital dollars Capital Rationing Anggaplah biaya modal 10%, dan perusahaan memiliki sumber daya total $20 juta, saat ini perusahaan dihadapkan pada beberapa proposal proyek sbb: Proyek Arus kas (jutaan dolar) investasi CF 1 CF 2 PV (DF10%) Indeks Profitabilitas J -$3

$2.2 $2.42 $4 1/3=0.33 K -$5 $2.2 $4.84 $6 1/5=0.2 L -$7

$6.6 $4.84 $10 3/7=0.43 M -$6 $3.3 $6.05 $8 2/6=0.33 N

-$4 $1.1 $4.84 $5 =0.25 Karena dana terbatas $20 juta, maka Proyek yang dipilih: L,J,M, dan N Jika dana terbatas 10 juta, proyek mana yang dipilih? Capital Rationing Hat company is considering seven capital investment propoasl, for which the funds available are limited to a maximum of $12 million. The projects are independent and have the following cost and profitability index associated with them: Project A Cost

PI 1,18 B $4,000,000 3000,000 C 5,000,000 1,33 D 6,000,000 1,31 E 4,000,000

1,19 F 6,000,000 1,20 G 4,000,000 1,18 1,08 Under strict capital rationing, which projects should be selected ? Study Problems Jack tar, CFO sheetbend Inc, membuka amplo rahasia perusahaan. Isinya adalah draft tawaran untuk kontrak memasok kanvas ransel pada angkatan Laut AS. Surat memo dari CFO sheetbend meminta mengkaji tawaran itu sebelum diajukan.

Tawaran dan dokumen pendukungnya disiapkan oleh staf penjualan sheetbend. Sheetbend diminta memasok 100.000 yard kanvas ransel selama 5 tahun, dengan harga jual adalah tetap sebesar $30 per yard Tn. Tar tidak biasanya terlibat dalam penjualan. Tapi tawaran ini tidak akan berkomitmen pada Sheetbend dengan kontrak jangka panjang dan harga tetap. Kedua memproduksi kanvas ransel membutuhkan $1.5 Tar mulai bekerja pada akhir minggu mengumpulkan fakta dan asumsi sbb: - Pabrik di Oleasantoro dibangun tahun 1900 an dan sekarang menganggur. Pabrik ini diusutkan penuh di permukaan Sheetbend, kecuali biaya pembelian tanah (19470 senilai $10,000 - Sekarang tanah itu adalah properti pinggir pantai yang bernilai. Tar berfikir tanah dan pabrik yang menganggur itu bisa dijual dalam waktu dekat dengan harga $600,000 - Merenovasi pabrik akan berbiaya $500,000. invetasi ini akan diusutka secara garis lurus selama 10 tahun - Mesin baru akan berbiaya $1 juta. Investasi ini bisa diusutkan secara garis lurus selama 5 tahun - Pabrik yang direnovasi dan mesin baru akan berusia bertahun-tahun. Akan tetapi, pasar yang tersisa untuk kanvas ransel itu kecil, dan tidak jelas apakah order tambahan bisa diperoleh begitu kontrak AL berakhir. Mesin ini khusus dan hanya nbisa digunkan untuk kanvas ransel .

Nilai jual bekasnya diakhir tahun ke lima mungkin nol. - Modal kerja pada awal tahun adalah $300.000, dan modal kerja ini diperkirakan 10% dari total pendapatan. - Ramalan laba staf penjualan dari kontrak AL, dapat dilihat pada tabel 1 - Saat ini ada tawaran dari penjualan dari perusahaan pengembang real estate untuk membeli tanah dan pabrik Pleasantboro milik Sheetbend dengan harga $1,5 juta tunai Tabel 1 Dalam Ribuan 1 1. Penjualan (yard) 2. Harga per yard 3. Pendapatan ($) 4. Harga pokok penjualan 2 3 4

5 100 100 100 100 100 $30 $30 $30 $30 $30 $3,000 $3,000

2,271 2,362 $3,000 2,457 $3,000 $3,000 2,100 2,184 5. Arus kas operasi (3-4) 900 816 729250 638 543 6. Penyusutan

250 250 250 250 250 7. Laba operasi (5-6) 650 566 479 388 293

227,5 198,1 167,7 135,8 102,5 $422,5 367,9 311,3 252,2 190,5 8. Pajak (35%) 9. Laba bersih (7-8)

Apakah Tn. Tar seharusnya merekomendasikan mengajukan tawaran pada AL pada harga proposal $30 per yard?. Tingkat dikonto untuk proyek 12% . 2. PT. Dallas sedang mengevaluasi proyek pembelian mesin baru. Harga mesin Rp 175 juta, dengan tambahan biaya pemasangan Rp 25 juta. Usia mesin adalah 5 tahun. Nilai buku mesin pada akhir tahun ke 5 adalah 0, tapi mesin masih dapat dijual sebagi besi tua dengan harga 5 juta. Mesin memerlukan tambahan modal kerja bersih Rp 10 juta, dan dengan penggunaan mesin tersebut dapat menghemat biaya sebelum pajak sebesar Rp 80 juta per tahun. Tingkat pajak adalah 15%. Haruskah mesin dibeli apabila biaya modal PT Dallas adalah 15% ? INTRODUCTION TO RISK IN CAPITAL BUDGETING What measure of risk is relevant in capital budgeting In capital budgeting, a project can be looked at

on three levels: 1. Stand-alone risk 2. Corporate risk 3. Systematic risk Stand Alone Risk Mengukur stand-alone risk berarti mengukur ketidakpastian keuntungan atau kepastian arus kas Usulan Investasi A Probabilitas Arus kas 0,10 3,000 0,20 4,000 0,40 5,000 0,20 6,000 0,10 7,000 Usulan Investasi B

Probabilitas Arus kas 0,05 3,000 0,20 4,000 0,50 5,000 0,20 6,000 0,05 7,000 E(CF) = 5.000 E(V)= 5.000 A=1.095 B=894 . Apabila E(V) dari kedua investasi tidak sama, maka penggunaan sebagai indikator risiko menjadi sulit dilakukan, untuk itu digunakan coefficient of variation (CV) CV = /E(V) C

D E(V) 1.000 1.500 400 500 CV 0,40 0,33 Problem Misalkan saudara diminta untuk memilih salah satu diantara kedua proyek berikut ini: A

B NPV Prob NPV Prob $100 0,30 $300 0,30 $400 0,40

$500 0,40 $700 0,30 $700 0,30 Pertanyaan: a. Dengan menggunakan NPV maksimum yang diharpkan, proyek mana yang saudara pilih? b. Dengan menggunakan coenffidient of variation, proyek mana yang saudara pilih? Risiko Proyek Beberapa metode yang bisa digunakan antara lain: a. Analisis Sensitivitas b. Analisis Scenario c. Analisis Pohon Keputusan

d. Analisis Berak Even Mean-standard deviation Analysis Dilakukan dengan memasukan arus kas dari setiap kondisi perekonomian, yang akan membentuk probabilitas untuk NPV kemudian menghitung probabilitas untuk NPV tertentu. Pendekatan ini mengasumsikan bahwa arus kas bersifat independen dari waktu ke waktu. Rata-rata (mean) distribusi probabilitas NPV adalah: krf= suku bunga bebas risiko Risiko dari proyek adalah: Mean-standard deviation Analysis Kondisi perokonomian Arus kas masuk bersih Prob Thn 1 Thn 2

Thn 3 Thn 4 Resesi 0,25 $4.300 $4.570 $4.400 $19.716 Rata-rata 0,50 $7.302 $7.747

$7.333 $23.716 Baik 0,25 $9.812 $10.400 $10.450 $30.880 CFT $7.179 $7.616

$7.397 $24.507 $1.952 $2.065 $2.139 $4.025 NPV =$9.103 NPV = $54.090 krf =10% Problem perusahaan Anda memperoleh informas arus kas proyek sbb: Thn 1

Thn 2 Thn 3 Prob Arus kas Prob Arus kas Prob Arus kas 0,1 $1.000 0,2 $1.000

0,2 $1.000 0,2 $2.000 0,3 $2.000 0,3 $2.000 0,3 $3.000 0,4

$3.000 0,4 $3.000 0,4 $4.000 0,1 $4.000 0,1 $4.000 CFT $1.967,5 NPV

$1.518 a. Tentukan expected NPV, dan standard deviasi NPV b. Berapa probabilitas proyek akan menghasilkan NPV=0 B. Sensitivity analysis Sensitivity analysis involves determinan how the distribution of possible net present values or internal rates of return for a particular project is affected by a change in one particular input variable. This is done by changing the value of one input variable while holding all other input variables constant Example : Ekspansi proyek BQC 0 1 2 3

4 Pendapatan 40.000 40.000 40.000 40.000 Biaya variable 24.000 24.000 24.000 24.000

Biaya tetap 5.000 5.000 5.000 5.000 Penyusutan 1.756 2.872 1.832 1.272 Laba sebelum pajak $9.244

$8.128 $9.168 $9.728 Pajak (40%) 3.698 3.251 3.667 3.891 Laba bersih $5.545 $4.877

$5.501 5.837 Arus kas operasi $7.302 $7.749 $7.333 $7.109 Bangunan & peralatan $20.000 kenaikan modal kerja 6.000 CF from Operation

Pengembalian MK 6,000 Nilai sisa 10,607 Net Cash Flow -$26.000 $7.302 NPV (12%) = $6.989 IRR = 21,9% $7.747 $7.333 $23.716

Keterbatasan Analisis Sentivitas Umumnya risiko stand-alone proyek tergantung pada faktor: a. Sensitivitas NPV terhadap variabel kunci b. Rentang nilai yang mungkin dari variabel tersebut seperti tercermin dalam distribusi probabilitasnay Analisis sensitivitas hanya mempertimbangkan faktor (1), maka analisis tidak lengkap C. Scenario Analysis Project analysis given a particular combination of assumptions Skenario Prob Volume penjualan Harga jual NPV (ribuan $)

Terburuk 0,25 15.000 unit $1.500 -$5.768 Base case 0,50 20.000 unit $2.000 $6.989 Terbaik

0,25 25.0000 unit $2.500 $23.390 NPV yang diharapkan $7.900 NPV $10.349 CVNPV 1,3 NPV yang diharapkan = NPV =

Pi (NPVi) Shao ondustries is considering a proposed project for its capital budget. The company estimayes that the projects NPV is $12 million. This estimate assumes that the company and market conditions will average over the next few years. The companys CFO, howerer, forecast that there is only a 50 percent chance that the economy will be average. Reconizing this uncertainty, she has also performed the following scenario analysis. Economic scenario Recession Probability of outcome 0,05 NPV ($70 million) Bellow average 0,20 ($25million)

Average 0,50 $12 million Above average 0,20 $20 million Boom 0,05 $30 million What is the projects expected NPV, standard deviantion and coefficient of variantion. D. Analisis Pohon Keputusan

Digunakan untuk mengevaluasi proyek-proyek yang memiliki beberapa titik pembuatan keputusan. Arus kas dan probabilitasnya digambarkan dalam suatu diagram pohon yang disebut dengan pohon keputusan. Kemudian probabilita gabungan dari setiap cabang dikalikan dengan NPV dari cabang tersebut dan hasilnya dijumlahkan untuk memperoleh expected NPV . = 17. 677 NPV = = 22.020 E. Break Even Analysis Example given the forecasted data on the next slide, determine the number of olanes that the company must produce in order to break even, on an NPV basis. The companys cost of

capital is 10%. Break Even Analysis Investment Year 0 years 1-6 $900 .................................................................................................................................................................... ................................................................... Sales 15.5xPlans Sold Var. cost 8.5xPlanes Sold Fixed Costs 175 Depreciation 900/6=150 Pretax Profit (7xPlanes Sold) - 325 Taxes (50%) (3.5x Planes Sold) 162.5

Net Profit (3.5x Planes Sold) 162.5 Net Cash Flow 900 (3.5x Planes Sold) 12.5 Break Even Analysis Answer (Accounting) the break even point, is the # of Planes sold were the fixed costs and depreciation = $0. 0 = - (3.5 x Planes Sold 162.5) Planes Sold = 165.5/3.5 = 46.4 planes Atau Break even = FC + Depreciation Price/unit variable cost/init Break even akuntasi tidak memperhitungkan opportunity cost investasi awal $900, meskipun terjadi break even sebenarnya perusahaan masih rugi secara ekonomis, Manajer keuangan bisa menghitung Break even dengan

memasukan Present value aliran kas. Break Even Analysis Answer (finance) the break even point, is the # of Planes sold that generates a NPV= $0 the present value annuity factor of a 6 year cash flow at 10% is 4.355 thus, NPV = - 900 + 4.355 (3.5 x Planes Sold 12.5) Break Even Analysis Answer solving for Planes Sold 0 = - 900 + 4.355 (3.5 x Planes Sold 12.5) Planes Sold = 63 Problem Misalkan perusahaan mencoba menganalisis ususlan investasi. Investasi awal Rp 1.000 juta, umur 5 tahun, tingkat diskonto 20%. Perhitungan aliran kas setiap tahun sbb:

Aliran kas Penjualan (1000 unit) Rp2.000 juta Biaya variabel (30%) 600Juta Biaya tetap 800 juta Penyusutan 200 juta Total biaya 1.600 juta Laba sebelum pajak

400 juta Laba setelah pajak 160 juta Aliran kas 240 juta Pertanyaan : tentukan Break even akuntansi, dan Present Value Break Even? . Methods for incorporation risk into capital budgeting 1. Certainly Equaivalent 2. Risk-Adjusted discount rates Certanty Equivalent (CE) Memasukan risiko dalam perhitungan arus kas Konsep CE dapat diterapkan dalam capital budgeting dengan cara: a. Perkirakan CE dari kas setiap tahun berdasarkan arus kas

yang diharapkan pada tahun tersebut dan risikonya b. Gunakan tingkat bunga bebas risiko (rf) untuk menghitung NPV proyek CE = t ACFt = arus kas yang pasti arus kas yang diharapkan Contoh Suatu perusahaan dengan tingkat pengembalian yang diinginkan sebesar 10%, sedang membangun sebuah fasilitas penelitian baru dengan umur 5 tahun. Pengeluaran awal proyek $120.000. arus kas masuk yang diharapkan serta koenfisien tingkat kepastian setara adalah sebagai berikut: Tahun Arus kas yang diharapkan t CE 1

$10.000 0,95 $9.500 2 20.000 0,90 18.000 3 40.000 0,85 34.000 4

80.000 0,75 60.000 5 80.000 0,65 52.000 Hitung NPV proyek: NPV =9.500 + 18.00 + 34.00 + 60.000 + 52.000 120.000 (1+10)1 (1+10)2 (1+10)3 (1+10)4 (1+10)5 NPV =$19.902,5 Norohna Inc, mempertimbangkan 2 proyek yang mutually

exclusive. Nilai yang diharapkan dari arus kas proyek tersebut adalah sbb: Tahun Proyek A Proyek B t t 0 -$300.000 -$300.000 1,00 1,00 1

100.000 200.000 0,95 0,90 2 200.000 200.000 0,90 0,80 3 200.000

200.000 0,85 0,70 4 300.000 300.000 0,80 0,60 5 300.000 400.000 0,75

0,50 Jika tingkat bebas risiko setelah pajak adalah 8%, proyek mana yang dipilih? Risk-Adjusted discount Rates The use of the risk-adjusted discount rate based on the concept that investor demand higher returns for more risky projects If the risk associated with the invesment is greater than the risk involved in a typical endeavor, then the discount rate is adjusted upward to compenaste for this risk Expenssed mathematically the net present value using the risk-adjusted discount rate becomes NPV h ACFt - Io t=1 (1+ i*)t Where ACFt = the annual after-tax cash flow in time period I0 = the initial outlay i* = the risk adjusted discount rate n = the projects expected life

Contoh:Risk-Adjusted discount Rates Hokie corporation mempertimbangkan 2 proyek mutually exlusive. Masing-masing proyek mensyaratkan pengeluaran awal $10.000 dan akan beroperasi selama 5 tahun. Distribusi probabilitas tiap proyek untuk tahun 1 hingga tahun 5 sbb: Proyek A Proyek B Prob Arus kas Prob Arus kas 0,15 $4.000 0,15

$2.000 0,70 $5.000 0,70 $6.000 0,15 $6.000 0,15 $10.000 Oleh karena proyek B yang lebih berisiko, maka manajemen memutuskan untuk menerapkan tingkat pengembalian 15% pada evaluasinya, dan hanya 12% untuk proyek A. tentukan NPV masing-masing proyek. NPV A =$8.024 NPV B = $10.113

Risk-adjusted discount rates Tahun Arus kas yang diharapkan 0 (2juta) 1 1juta 2 1juta 3 1juta 4

1juta 5 1juta Biaya modal perusahaan secara keseluruhan adalah 15%. Perusahaan menentukan jika proyek yang dianalisis memiliki risiko yang relatif sama dengan proyek-proyek lain perusahaan pada umumnya, atau memiliki Risiko sama dengan rata-rata, i* = 15% (NPV=?) Jika di atas rata-rata, premi risiko sebesar 5%, i* = 20%, NPV? Jika di bawah rata-rata, premi risiko = - 5%. i*= 10%, NPV? Corporate risk Risiko dalam perusahaan atau corporate risk adalah kontribusi proyek terhadap risiko total perusahaan, atau dampak proyek terhadap variabilitas arus kas perusahaan secara keseluruhan Corporate risk merupakan fungsi dari deviasi standar proyek dan korelasi antara keuntungan proyek dengan keuntungan perusahaan Corporate risk diukur dengan bP,F = (p/F).rp.F

bP,F = within-firm risk atau corporate risk p = deviasi standar keuntungan proyek F = deviasi standar keuntungan perusahaan rPF = koefisien korelasi antara keuntungan proyek dengan keuntungan perusahaan Systematic risk atau market risk Risiko pasar atau beta risk adalah risiko suatu proyek dilihat dari konteks atau sudut pandang investor yang memiliki portofolio saham atau kontibusi proyek terhadap risiko portofolio Risiko pasar dapat diukur dengan menghitung beta pasar proyek atau project marker beta Beta proyek dapat dihitung dengan cara: a. meregresi keuntungan proyek dengan keuntungan portofolio pasar (sebagai variabel bebas) b. menggunakan beta dari perusahaan lain yang memiliki bisnis yang sama denganproyek yang dianalisis Minicase PT. AGA sedang mempertimbangkan pemeblian traktor yang akan menelan biaya sebesar Rp 100 juta, akan meningkatkan arus kas operasi sebelum pajak (tidak termasuk efek depresiasi) sebesar RP 40 juta setahun. Truk

akan didepresiasi dengan metode garis lurus tanpa niali sisa. Pajak adalah 15%, dan biaya modal perusahaan mengenai usia traktor. Secara khusus Elizabeth meyakinkan bahwa ia tahu banyak tentang traktor yang hanya mampu bertahun 4 tahun saja. Philip setuju dengan pendapat Elizabeth, tapi ia mengatakan ada beberapa traktor yang dapat bertahan sampai 5 tahun. Laura berkata bahwa ia ada bebrapa traktor dapat bertahan samapai 8 tahun. Direktur perusahaan terpaksa menengahi perdebatan tersebut. Untuk tidak mengecewakan manajernya maka ia memutuskan untuk mempertimbangkan pendapat ke tiga manajer tersebut dengan membuat analisis scenario. Ia memberikan probabilitas 70% bahwa usia traktor 5 tahun, 20% bahwa usai traktor 4 tahun, dan 10% bahwa usia traktor 8 tahun. Apakah propoasl proyek pembelian traktor ini dapat diterima? Cost of Capital Cost of Capital Objective : to get a better understanding of how a company calculates and employs the cost of capital in making invesment decisions Cost of Capital (biaya modal)

Short term debt Cost of debt (kd) Long term debt COC Preferred stock Common stock Cost of Equity (Ke) New common stock Retained earning Cost of Capital Biaya modal adalah: biaya yang harus ditanggung untuk mendapatkan modal baik yang berasal dari utang, saham, preferen, saham biasa atau laba ditahan. Biaya modal akan tercermin pada tingkat keuntungan yang disyaratkan oleh masingmasing pemodal Cost of Capital (biaya modal) Manfaat biaya modal dalam manajemen keuangan: 1. Dipakai sebagai discount rate dalam perhitungan NPV

2. Dipakai sebagai tingkat keuntungan minimal jika metode IRR digunakan untuk mengevaluasi propoasl investasi Menghitung biaya modal Biaya modal harus dihitung berdasarkan suatu basis setelah pajak (after tax basis) Masing-masing sumber dana memiliki biaya modal yang berbeda Perhitungan biaya modal dilakukan secara Individual Keseluruhan dengan menggunakan biaya modal rata-rata tertimbang (weighted average cost of capital) 1. Biaya Utang (Cost of Debt) Biaya utang (kd) merupakan besarnya biaya yang harus ditanggung oleh perusahaan karena menggunkan dan yang berasal dari pinjaman, yang tercermin pada tingkat keuntungan yang disyaratkan oleh pemberi pinjaman. PN = penerimaan bersih, B= bunga, P= Nilai nominal, nn= Periode waktu

Contoh 1L Andaikan seorang investor bersedia membayar Rp. 900/lembar untuk suatu obligasi (surat hutang). Surat berharga tersebut memiliki nilai nominla sebesar RP 1000/lembar, dengan bunga tahunan 8%, dan jangka waktu pelunasan 10 tahun. Pajak 30%. Berpa biaya obligasi tersebut? Kd=9,6% Jika dikeluarkan komisi broker (flotation cost) Rp 50, maka penerimaan bersih Rp 850, berapa biaya obligasi tersebut? Kd =10,5% Jika obligasi terjual seharga nilai nominla kd = 8% Contoh 2 Assume that basket Wonders (BW) has $1,000 per value zero-coupon bonds ountstanding. BW bonds are currently trading at $385.45 with 10 years to mutually. BW tax bracket is 40% $0 + $1,000 $385.54 = (1 + kd) 10 (1 + kd)10 = $1,000/$385.54 (1 + kd) = (2.5938) (1/10)

kd = 1 or 10% 2. The cost of capital for preferred stock Biaya modal saham preferen adalah tingkat keuntungan yang disyaratkan oleh pemegang saham preferen Biaya saham preferen adalah dividen saham preferen tahunan dibagi hasil penjualan saham preferen. Dps Kps = Pnet Contoh PT damai menegluarkan 10% (deviden tahunan) saham preferen dengan nilai nominal Rp 10.000 per lembar. Biaya penerbitan dan penjualan diperkirakan 5%. Berapa biaya saham preferen? jawab: kp = 1000/9500 = 10,52% Perusahaan menjual saham preferen yang memberikan dividen $10 per thaun. Harga saham $100, dengan biaya flotation cost $2,5 per lembar saham. Berapa saham preferen?

What the cost of prefern stock? Pp =$113,10; 10% Q; Par = $100; F =$2 use this Formula 0.1 ($100) Dps Kps = $113.10 - $2.0 Pnet = $10 = = 0.090 =9.0% $111.10 3. The cost of capital for common equity

Common equity: a. b. Retained Earnings New Common Stock Why is there a cost for retained earnings? Earnings can be reinvested or paid out as dividends Investor could buy other securities, earn a return Thus, there is an opportunity cost if earnings are eran on alternative investments of equal risk They could buy similar stocks its own stock and company could repurchase its owen stock and earn Ks. So, Ks is the cost of retained earnings. 3. Biaya laba ditahan Biaya modal sendiri yang berasal dari laba ditahan merupakan tingkat keuntungan yang disyaratkan oleh investor modal sendiri. Three ways to determine cost of retained earnings, ks:

1. CAPM: ks = kRF + (kM ckRF). 2. DCF : ks = D1/P0 + g 3. Own-Bond-Yield-Plus-Risk premium : ks = kd + RP. Cost of retained earnings based on the CAPM Following information is known: - KRF = 70% - MRP = 6% ks + kRF + (kM kRF) ks = 7% (6%) 1,2 ks = 14,2% The cost of retained earnings based on the DCF-method Use the DCF formula, when the following information is known - Do =$4.19 - Po =$50 - g=5%.

The cost of retained earnings based on the DCF-method Ks = D1 + g = Do (1+g) + g Po Po = $4.19(1.05) + 0.05 $50 =0.088 + 0.05 = 13.8% Find Ksusing the own-bond-yield-plus-riskpremimum method (Kd=10%, RP = 4%) ks = kd + RP ks = 10.0% + 4.0 = 14.0% Whats a reasonable final estimate of Ks

Method CAMP DCF Kd + RP Estimate 14.2% 13.8% 14.0% Average 14.0% 4. Biaya modal saham biasa baru Biaya modal saham biasa baru lebih tinggi dibandingkan biaya modal laba ditahan, hal ini dikarenakan adanya biaya penerbitan saham baru (flotation cost) Ke = D1 + g Po - F Keterangan: Po =Harga saham biasa saat ini D1 =Dividen yang diharapakan tahun mendatang

Ke = Tingkat keuntungna yang disyaratkan oleh pemodal saham biasa g =Tingkat pertumbuhan dividen F =Biaya penerbitan saham The cost of capital for new common stock Use the DCF formula, when the following information is known: Do = $4.19 Po = $50 g = 5% Flotation costs = 15% Remember, flotation reduce the revenus for the issuing firm, thus lower Po . New common stock, F = 15% ke = Do(1 + g) + g Po (1 F) = $4.19(1.05) + 5.0% $50(1 0.15) = $4.40 + 5.0% = 15.4% $42.50

Flotation adjustment: ke ks = 15.4% - 13.8% = 1.6% Add the 1.6% flotation adjustment to average ks = 14% to find average ke Ke = ks + flotation adjustment Ke = 14% + 1.6% = 15.6% Calculating the WACC Calculating the WACC, when a company finances with 30% debt, 10% preferred stock and 60% common equity The formula for the WACC is WACC = wd kd (1 T) + wps kps + wceKs First use only the retained earnings component of common equity (wce) Whats WACC using only retained earnings for equity component of WACC1 WACC = wdkd (1 T) + wpskps + wceks) = 0.3 (10%)(0.6) + 0.1(9%) = 0.6)14%) = 1.8% + 0.9% + 8.4% = 11.1% = cost per $1 financed until retained

earnings used up . The capital structure for the bias corporation follows. The company plans to maintain its debt structure in the future. If the firm has a 6 percent after tax cost of debt, a 13.5 percent cost of preferered stock, and a 19 percent cost of common stock. What is the firms weighted cost of capital? Capital structure ($000) Bond Preferred stock $1,100 250 Common stock 3,700 $5,050 Bias Corporation weighted cost of capital Capital structure

Weights Individual cost Weighted cost Bond $1,100 0,2178 6% 1,31% Preferred stock $250 0,0495

13,5% 0,67% Common stock $3,700 0,7327 19,0% 13,92% $5,050 15,9% Problem

Target struktur modal perusahaan adalah 30% hutang, 10% saham preferen, dan 60% modal sendiri (yang seluruhnya berasal dari laba ditahan). Biaya hutang 12%, biaya saham preferen 12,6%, dan biaya laba ditahan 16,5%. Pajak 40%. Tentukan WACC? Struktur modal untuk perusahaan Crayon adalah sbb. Perusahaan berencana untuk mempertahankan struktur utangnya di amsa mendatang. Jika perusahaan memiliki 5,5% biaya utang setelah pajak, 13,5% biaya saham preferen, dan 18% biaya saham biasa. Tentukan WACC? Obligasi Saham preferen $1.083.000 268.000 Saham biasa 3.681.000 Total 5.032.000

Marginal cost of capital MCC merupakan biaya untuk memperoleh rupiah tambahan sebagai modal baru. Membuat skedul MCC membutuhkan informasi mengenai Biaya modal (WACC) dari penggunaan alternatif modal sendiri, laba ditahan dan sahaam biasa baru. Titik peningkatan MCC (break point): merupakan titik meningkatnya WACC perusahaan karena semua laba ditahan telah digunakan dalam pendanaan. Break point = laba ditahan proporsi modal sendiri Contoh: Suatu perusahaan membutuhkan modal baru sebanyak 500 juta. Struktur modal yang hendak dicapai adalah 30% hutang, 10% dari saham preferen dan 60% dari modal sendiri berupa laba ditahan atau saham biasa baru. Biaya 12,6%; 16% dan 16,8%. Perusahaan berharap dapat menahan laba Rp 100 juta. Buatlah skedul MCC untuk modal baru ini.

Contoh : WACC jika menggunkan laba ditahan = 0,3x8,4% + 0,1x12,6% + 0,6x16% = 13,38% WACC jika menggunakan saham biasa baru = 0,3x8,4% + 0,1x12,6% + 0,6x16,8% = 13,86% Break point = 100 juta/0,6 + 166,67 juta pada saat dana baru yang digunakan mencapai Rp 166,67 juta, maka perusahaan telah menggunakan seluruh laba ditahan. Setelah jumlah ini, maka perusahaan harus menerbitkan saham biasa. Skedul MCC WACC WACC=13,86 MCC WACC=13,38 Modal baru 166,67 juta Skedul MCC dengan depresiasi Melanjutkan soal sebelumnya, misalkan diketahui bahwa perusahaan memiliki dana

dari depresiasi sebesar 50 juta. Sekdul MCC akan menjadi WACC= 13,86% MCC WACC= 13,38 216,67 juta 50 juta A B A. Adalah titik dimana seluruh dana depresiasi telah dipakai habis B. Adalah titik dimana seluruh laba ditahan telah dipakai habis Investment Opportunities Schedule/IOS IOS adalah suatu grafiuk yang menggambarkan proyek-proyek yang potensial dalam suatu urutan berdasarkan ranking IRR proyek tersebut Contoh: Misalkan PT.XX memiliki beberapa kesempatan investasi yang terbaik (pengembalian tertinggi) sapai yang terburuk (pengembalian terendah) seperti table berikut: Proyek manakah yang dipilih

SKEDUL KESEMPATAN INVESTASI Kesempatan Investasi A B C D E F G Tingkat Pengembalian Internal (IRR) 15,0% 14,5% 14,0% 13,0% 12,0% 11,5% 10,0% Investasi

Awal Investasi Kumulatif 100.000 200.000 300.000 200.000 200.000 200.000 100.000 100.000 300.000 600.000 800.000 1.000.000 1.200.000 1.300.000 SKEDUL KESEMPATAN INVESTASI IRR

15% IRR 14% A 13 B 12 11 10 IRR IRR C IRR D E 12,1% IRR F IRR

MCC IOS G 0 100.000 600.000 1.000.000 Proyek yang layak dipilih adalah proyek: A, B, C, D, E karena IRR > MCC proyek. Soal PT Sentosa sedang menyusun anggaran untuk tahun mendatang. PT sentosa memperkirakan laba bersih Rp 75juta, dan dividen payout ratio (DPR) adalah 40%. Dana dari deprisiasi diperkirakan Rp 30 juta. Penghasilan dan dividen perusahaan diperkirakan tumbuh secara konstan sebesar 5%/tahun. Dividen saat ini adalah Rp 90, dan harga pasar saham saat ini Rp 859. bunga kredit baru dari bank adalah 14%. Biaya emisi saham baru 20%. Struktur modal yang optimal adalah 60% modal senidri dan 40% hutang. Pajak 40% PT Sentosa memiliki kesempatan investasi proyek yang bersifat independen, sbb: .

Proyek Biaya IRR A 150 JUTA 17% B 200 JUTA 14% C 150 JUTA 16%

D 120 JUTA 15% Buatlah anggaran modal yang optimal JAWAB Laba ditahan = 75 juta-40% (75juta)= 45juta Biaya laba ditahan : ks = D1/Po + g = 90(1+0,05) +0,05 =18,75% 859 Biasa saham biasa baru = 90 (1 + 0,05) + 0,05 = 18,75% 859 (1-0,2) WACC1 = 12,96% WACC2 = 14,61% (jika menggunakan saham biasa baru) Breka point = 45/0,6 = 75 juta Karena ada depresiasi 30 juta, maka break point = 105 juta . % IRR

17% A IRR C IRR 14,61% IRR 12,96% D B 100105 MCC IOS 150 200 300 400 500 600 Proyek A, C dan D diterima. Anggaran modal optimal= 420 juta SOAL 1. PT ABC ingin melakukan ekspansi dalam situasi yang cukup sulit seperti sekarang ini. Dari

perhitungan biaya modal rata-rata diketahui bahwa semakin tinggi kebutuhan dana, maka akan meningkatkan cost of capital. Sumber dana berasal dari modal sendiri sebesar 40%, pinjaman bank 35% dan 25% berasal dari penerbitan obligasi. Berikut ini adalah table cost of capital untuk masing-masing interval kebutuhan dana. Cost of capital Interval kebutuhan dan (miliyar RP) Cost of capital 0-20 13,0% 20-45 13,5% 45-75

15,0% 75-110 16,5% 110-160 17,5% >160 18,5 Setelah dilakukan studi kelayakan, diperoleh informasi bahwa tingkat keuntungan dari 6 proyek tersebut adalah: Proyek IRR Investasi awal (miliyar RP) Pengalengan sayur

15,5 20 Palm oil 13,5 50 Rumah makan 19,0 15 Hotel 16,5 30

Pabrik sepatu 14,0 35 Bisnis eceran 18,0 20 Proyek manakah yang layak dilaksanakan? Dan berapa anggaran modal yang optimal? 2. PT Angkasa memiliki struktur modal sbb: Hutang 25% Saham preferen 15%

Saham biasa 60% Total 100% Perusahaan mengharapkan kenutungan bersih 16.000.000, -tahun ini. DPR 25%, pajak 40%, dan investor mengharapkan pendapatan dan individen tumbuh 9% dimasa mendatang. Tahun lalu perusahaan membayar dividen 3.600,-(D o=3600), dan saat ini harga saham 60.000,- per lembar. Suku bunga bebas risiko adalah 11%, dan suatu saham rata-rata memberikan rate of return yang diharapkan sebesr 14%. Beta saham PT Angkasa adalah 1,5. saham baru memiliki flotation cost 10% Saham preferen dapat dijual ke publik dengan harga 100.000,- per lembar, dengan dividen 11.000,-. Flotation cost 5.000,- per lembar. Hutang dapat dijual dengan membayar bunga sebesar 12% Pertanyaan 1. Hitung biaya modal dari: hutang, saham preferen, laba ditahan, dan saham biasa baru 2. Tentukan Retained Earning Break Point

3. Tentukan WACC dengan menggunakan laba ditahan, dan WACC dengan menggunakan saham biasa baru. 4. Gambarkan skedul MCC 5. Misalkan PT Angkasa meramalkan bahwa biaya depresiasi untuk periode yang direncanakan adalah 10.000.000,-. Bagaimana ini mempengaruhi skedul MCC?

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