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working capital is a necessary requirement for any type of business activity banks in india nowadays constitute the main suppliers of working capital
the other source of spontaneous short-term financing is the accrued expenses which arise by the general conduct of business an accrued expense is an
funds produced from operations throughout an accounting period raise working capital by an equivalent amount the two major components of funds
a bill is explained as an unconditional order in writing addressed through one person to the other signed through the person providing it requiring
if a company creates sales to a number of customers on credit terms this will have to wait for two or still three months before its debtors pay that
it is a spontaneous source of finance that is commonly extended to business organization depending on the custom of the competition and trade
change of technology changes in technology commonly leads to improvements in the efficient processing of raw material reduce in wastages more speedy
seasonal variations commodities along with seasonal demand results in raised level of working capital requirement it could be offset through scaling
the working capital needs of a firm are influenced by many factors the important ones are as followsnature of business the working capital necessity
after going through this section you must be capable to know the concept and characteristics of working capital identify with the difference among
the decisions about long-term investment are depends on judgments on future cash flows the improbability of such cash flows and the opportunity cost
individuals commonly prefer possession of cash immediately or in the present moment quite than the same amount at any time in the future such
pvainfin a1 k-1 a1 k-2 a1 kinfin 1 a 1 kinfinmultiplying both the sides of eq a7 by 1k providespvainfin 1 k a1 k a 1 k-1 a 1
derivation of formulasi future value of an annuityfuture value of an annuity isfvan a1 kn -1 a 1 kn - 2 a 1 k a
equation illustrates the relationship in between pvan a k and n so manipulating this a bitwe find thata pvan k 1 kn1 kn - 1k 1 kn1 kn - 1 in
in common terms the present value of a regular annuity may be shown as given belowpvnn a1 k a1 k2 a1 kn a 11 k 11 k2 11 kn a 1 kn- 1k 1
let us assume you expect to obtain rs2000 yearly for the next three years the receipt of rs2000 is evenly divided one part that is rs1000 is obtained
how much must you save annually in order to accumulate rs 20 00000 by the ending of 10 years whether the saving earns an interest of
assume that you are interested in understanding how much must be saved regularly over a period of time in order that at the ending of the period you
assume you are receiving an amount of rs5000 twice in a year for subsequent five years one time at the starting of the year and another amount of rs
compute the present value of rs 1000 receivable 6 years thus if the discount rate is 10 percentsolution the present value is computed as follows pvkn
we have discussed the computation of the future value in the previous sections here let us work the process in opposite let us assume you have won a
occasionally cash flows may have to be discounted more often than once a year semi- monthly daily annually or quarterly the outcome of this is as
assume mr ram deposits rs 10000 annually in a bank for 5 years at 10 percent compound interest rate compute the value of this series of deposits on
an annuity is explained as stream of uniform duration cash flows the payment of life insurance premium through the policyholder to the insurance