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DR IAN MACKECHNIE
10:16:46 PM
An important thing to understand is that the cash flows for years 1 to 5 amount to $65,000

DR IAN MACKECHNIE
10:17:38 PM
However, when they are discounted or brought back to todays values, using the % of 12%, there REAL value is $47,675

DR IAN MACKECHNIE
10:17:53 PM
Understand?

DR IAN MACKECHNIE
10:18:16 PM
Now the 12% is the RISK factor

KOI PIT WOON
10:18:17 PM
yes...understood

DR IAN MACKECHNIE
10:19:15 PM
Now, because the cash flows,AFTER discounting, or taking into consideration the RISK factor, is GREATER than the intial outlay of $40,000, then the project should be accepted and proceed

DR IAN MACKECHNIE
10:19:40 PM
Understand?

KOI PIT WOON
10:19:56 PM
yes...

DR IAN MACKECHNIE
10:19:59 PM
Yuen????

DR IAN MACKECHNIE
10:20:20 PM
Good, Mr Koi

YUEN BOK MUN
10:20:30 PM
i am confuse, how to get the 7675

YUEN BOK MUN
10:20:55 PM
still calculating

DR IAN MACKECHNIE
10:21:32 PM
OK..into the calculation, we put the initial outlay of $40,000. +/-

DR IAN MACKECHNIE
10:22:06 PM
Then we discounted the cash flows of $65,000 which gave us $47,675

DR IAN MACKECHNIE
10:22:10 PM


DR IAN MACKECHNIE
10:22:10 PM


DR IAN MACKECHNIE
10:23:00 PM
DEDUCT the DISCOUNTED cash flows FROM the initial outlay (47,675 - $40,000) and you get $7,675

DR IAN MACKECHNIE
10:23:30 PM
Understand??

KOI PIT WOON
10:23:49 PM
Dr. Is Net Present Value also refer to NetP rofit??...

DR IAN MACKECHNIE
10:24:16 PM
No, because we are talking about CASH flows only here

KOI PIT WOON
10:24:34 PM
ok...understood

DR IAN MACKECHNIE
10:25:16 PM
IF there were no non cash items, the accountants would probably say that the net profit from this project would be $65,000 less $40,000 = $25,000

DR IAN MACKECHNIE
10:25:40 PM
But that would not include deprecian on the machine ...

DR IAN MACKECHNIE
10:26:08 PM
Got that?

YUEN BOK MUN
10:26:34 PM
but , how to get the 7675?

KOI PIT WOON
10:26:41 PM
yes....

DR IAN MACKECHNIE
10:26:44 PM
If you have, then you should be able to tackle several of the assignment questions with confidence

DR IAN MACKECHNIE
10:27:08 PM
Did you see my explanation above, Yuen?

DR IAN MACKECHNIE
10:27:16 PM
Once again...

DR IAN MACKECHNIE
10:27:35 PM
The cash flows for years 1 to 5 amount to $65,000

DR IAN MACKECHNIE
10:27:38 PM


YUEN BOK MUN
10:27:46 PM
yes,

DR IAN MACKECHNIE
10:29:04 PM
However, we have to discount that amount each year by 12% to bring back to a discounted figure of $47,675. Deduct $47,675 from the initial outlay of$40,000 + $7,675

DR IAN MACKECHNIE
10:29:17 PM
= $7,675

DR IAN MACKECHNIE
10:29:46 PM
Understand?

YUEN BOK MUN
10:29:54 PM
yes

YUEN BOK MUN
10:30:05 PM
now i get the point

DR IAN MACKECHNIE
10:30:16 PM
Remember you calculate this with a financial calculator as each years cash flow has to be disco unted

DR IAN MACKECHNIE
10:30:29 PM
OK. Good

DR IAN MACKECHNIE
10:30:32 PM

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    Venue Stamford College, Jalan Barat, Petaling Jaya.
    Date 14 August 2010, 2:00PM - 6:00PM
    15 August 2010, 10:00AM - 6:00PM
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    Date 25 September 2010, 2:00PM - 6:00PM
    26 September 2010, 10:00AM - 6:00PM
    This module begins with a philosophical approach by revisiting the notion of the process of learning through enquiry. It will familiarize the student with the variety of research methods to allow the student to compile a professional consultative report relevant to their work or a dissertation for the purpose of academic pursuit. Students will learn the concepts and research terms of social sciences, the fundamentals of data collection, analysis and measurement. They will also study the different approaches in framing research questions and design a research study. Application of theoretical concepts, methodological perspectives and empirical approaches will also be covered. The overall objective is for students to conduct valid and independent research, produce and interpret data and make recommendations for effective organisational change by advancing reasoned and logical \arguments concretely justified by research findings.

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    Speaker Mr. Albert Lim, Adjunct Professor UBI
    Venue Stamford College, Jalan Barat, Petaling Jaya.
    22 August 2010, 10:00AM - 6:00PM
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    3 October 2010, 10:00AM - 6:00PM
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