Is there a meeting on financial management?

(1) If the equity cash flow method is adopted:

First of all, it is necessary to estimate the equity cash flow of the project, assuming that the expected cash flow of the hotel project is shown in the following table:

Expected cash flow is net cash flow, that is, cash flow after deducting investment, and loan principal and interest payment at the beginning of the year is not included in cash flow. As this is a new project, we assume that the initial equity value is zero, that is, the initial investment is all from debt, and the dividend and return on equity are calculated as follows:

The first year's investment interest = 1.00 billion yuan * 4% = 0.04 billion yuan.

Dividend = (2.0-1.0)/0.8 * 0.15 = 0.1875

Return on equity = (0.1875+0.04)/2.0 = 0.11375.

Discount rate = return on net assets+risk-free interest rate = 0.11375+0.03 = 0.14375 =14.375%.

According to the discount rate, the net present value of the project can be obtained as follows:

NPV =(- 1. 1)/( 1+0. 14375)^ 1+0.9/( 1+0. 14375)^2+2.4/( 1+0. 14375)^3+2.7/( 1 +0.14375) 4+3.0/(1+0.14375) 5 = 26 million yuan.

Because the equity value is zero, NPV is equal to net cash flow.

(2) If the entity cash flow method is adopted:

The entity cash flow method requires using the weighted average cost of capital (WACC) as the discount rate. The formula for calculating WACC is as follows:

WACC = E/V * Re + D/V * Rd * ( 1 - Tc)

Among them, E is the equity value of the enterprise, V is the total value of the enterprise, D is the debt value of the enterprise, Re is the required rate of return on equity, Rd is the interest rate of debt (after tax), and Tc is the income tax rate.

Assuming that the capital structure of the project is 50% equity and 50% debt, the required return on net assets is 18%, and the after-tax debt interest rate is 4%*( 1-20%)=3.2%, and WACC is calculated by substituting the above formula:

WACC = 0.5 * 18%+0.5 * 3.2% *( 1-20%)= 10.6%

According to the discount rate, the entity net present value (NPV) of the project can be obtained as follows:

NPV =(- 1.0)/( 1+0. 106) 1+0.9/( 1+0. 106)2+2.4/(65438+

Among them, the loan principal and interest paid at the beginning of the year are included in the cash flow. Because the market value of the investment is equal to the total value of the project, the entity net present value should be used to evaluate its feasibility.