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q describe about profitability indexprofitability index or pi- second method of estimate a project through discounted cash flows is profitability
q demerits of net present value methodi difficult to understand as well as implement- this method is tricky to understand as well as implement in
q merits of net present value methodmerits of npv method-i time value of funds is taken into consideration - for the reason that this method takes
q explain net present value methodnet present value npv method - this process measures the present value of returns per rupee invested in this method
demerits of pay back method-i it ignores the cash flows after the pay back period - the main shortcoming of this method is that it completely ignores
q what is qualities of pay back methodqualities of pay back method-i simple - the most important merit of this method is that it is simple to
q show the accept-reject criteriaaccept-reject criteria- if the actual payback period is not more than the predetermined payback period project would
q explain about pay back methodpay back method pb - the payback process is the simplest method this method computed the number of years required to
q what is cash flow criteriacash flow criteria - cash flow criteria are on the basis of cash flows rather than accounting profit cash flow methods
q explain demerits of accept-reject criteriademerits of arr-i it utilizes accounting income rather than cash flows - the principal short coming of
q merits of accept-reject criteriamerits of arr-i simple - arr method is very simple to understand and useii complete life time of the project is
q explain accept-reject criteriaaccept-reject criteria- if actual arr is elevated than the predetermined rate of return project would be accepted if
q show the accounting profit criteriaaccounting profit criteria - under accounting profit criteria there is merely one method for making capital
q what are the difficulties of capital budgeting1 measurement problems - identifying as well as measuring the costs and benefits of a capital
q importance of capital budgeting decision1 such decision affect the profitability of the firm - capital budgeting decision influences the long-term
q features of capital budgeting decisionsfeatures of capital budgeting decisions- moneys are invested in long-term assets moneys are invested in
q definition of capital budgetingcapital budgeting is the procedure of making decisions for investment in long-term assets it is a method of deciding
q types of investment decisions1 short-term investment decisions - this kind of investment decisions related to the short-term assets these decisions
q what do you signify by investment decisionsinvestment decision - the most significant function of financial management isnt only the procurement of
q show the present value of a single flow discounting or else present value of a single flow lump sum- we are able to determine the pv of a future
q explain discounting or present value conceptdiscounting or present value concept - according to this concept rupee one of today is more valuable
q explain compound value of an annuitycompound value of an annuity - annuity demotes to the periodic flows of equal amountsfv a 1in - 1iinstance -
compounded value of a series of cash flows - we have considered merely single payment made once as well as its accumulation effect an investor
multi-period compounding or else future value - if the company determination compounding interest half-yearly semi-annually instead of annually then
q example on compound value of the single flowmr x invests rs 1000 at 10 is compounded yearly for three years compute value after three yearsfv pv