- FINANCIAL MANAGEMENT PRESENTATION .pptx

CAPITAL BUDGETING TECHNIQUES USED BY APPLE- a presentation

1. CAPITAL BUDGETING TECHNIQUES OF APPLE PRIYA 21031E0141

2. INTRODUCTION Apple Inc.  is an American  multinational corporation  and  technology company  headquartered in  Cupertino, California , in  Silicon Valley . It  designs , develops, and sells  consumer electronics ,  computer software , and  online services . It was founded by Steve Jobs, Steve Wozniak and Ronald Wayne.   Devices  include the  iPhone ,  iPad ,  Mac ,  Apple Watch ,  Vision Pro , and  Apple TV ;  operating systems  include  iOS ,  iPadOS ,  macOS , and software applications and services include  iTunes ,  iCloud ,  Apple Music , and  Apple TV+ .

3. PAYBACK PERIOD The investment for the year is 2020 is 1513.65 Cr. Payback period = Year before full recover + unrecovered amt of investment/ cash flow during the year = 4 + 32.65/240 =4 + 0.136 = 4.1 years Therefore, the payback period for Apple is 4.1 years

4. ACCOUNTING RATE OF RETURN Year Income 2020 1097 2021 1395 2022 1249 2023 647 2024 816 ARR= AVERAGE INCOME / AVERAGE INVESTMENT AVG. INCOME= 1040.8 AVG. INVESTMENT= 1130.97 ARR= 1040.8/1130.97= 0.9202 = 92.02%

5. INTERNAL RATE OF RETURN Year Cashflows DF@10% PV DF@35% PV 2020 1106 0.909 1005.3 0.741 819.5 2021 105 0.826 86.7 0.549 57.6 2022 114 0.751 85.6 0.406 46.2 2023 156 0.683 106.5 0.301 46.9 2024 240 0.621 149 0.223 53.5 Cash outflow for Apple is 1046cr, for the year 2020 IRR=LDF%+[ IRR = 10+[ ][35-10]   =10+ [ ][ 25 ] = 10+ [0.9455][25] =10+23.63 =33.6% IRR=33.6% The internal rate of return is 33.6 % .  

6. NET PRESENT VALUE NPV = PV of cashflows - Initial Investment NPV = 1379.8 - 1513.6 = -133.8 NPV is negative. Year Cashflow ( cr ) [email protected]% PV of Cashflow 2020 1106 0.890 984.3 2021 105 0.792 83.1 2022 114 0.7006 80.4 2023 156 0.628 97.9 2024 240 0.559 134.1

7. PROFITABILITY INDEX Year Cashflow ( cr ) [email protected]% PV of Cashflow 2020 1106 0.890 984.3 2021 105 0.792 83.1 2022 114 0.7006 80.4 2023 156 0.628 97.9 2024 240 0.559 134.1 PI = PI = ‘ = 0.91 The profitability index of Apple for 12.3% COC is 0.9 which is less than 1.  

8. THANK YOU