Capital budgeting refers to investment decisions involving long-term assets used for production. It involves planning the allocation of capital to maximize long-term profitability. Common techniques for analyzing capital budgeting proposals include payback period, net present value (NPV), internal rate of return (IRR), and modified internal rate of return (MIRR). Payback period is the simplest but weakest method, while NPV is preferred because it considers the time value of money and cash flows over the project's lifetime. IRR estimates the project's expected rate of return but has deficiencies that MIRR aims to overcome.
Understand the nature and importance of investment decisions.
Distinguish between discounted cash flow (DCF) and non-discounted cash flow (non-DCF) techniques of investment evaluation.
Explain the methods of calculating net present value (NPV) and internal rate of return (IRR).
Show the implications of net present value (NPV) and internal rate of return (IRR).
Describe the non-DCF evaluation criteria: payback and accounting rate of return and discuss the reasons for their popularity in practice and their pitfalls.
Illustrate the computation of the discounted payback.
Describe the merits and demerits of the DCF and Non-DCF investment criteria.
Compare and contract NPV and IRR and emphasise the superiority of NPV rule.
Understand the nature and importance of investment decisions.
Distinguish between discounted cash flow (DCF) and non-discounted cash flow (non-DCF) techniques of investment evaluation.
Explain the methods of calculating net present value (NPV) and internal rate of return (IRR).
Show the implications of net present value (NPV) and internal rate of return (IRR).
Describe the non-DCF evaluation criteria: payback and accounting rate of return and discuss the reasons for their popularity in practice and their pitfalls.
Illustrate the computation of the discounted payback.
Describe the merits and demerits of the DCF and Non-DCF investment criteria.
Compare and contract NPV and IRR and emphasise the superiority of NPV rule.
Objectives of Capital Budgeting, Importance of Capital Budgeting, Advantages of Capital Budgeting, Disadvantages of Capital Budgeting, Capital Budgeting Process, CAPITAL BUDGETING TECHNIQUES: PAYBACK PERIOD, Advantages Of Pay Back Period (PBP), Disadvantages Of Pay Back Period (PBP), Net present value method, Internal Rate of Return,
This presentation provides an insight into techniques which can help business undertake financially viable projects using Capital Budgeting tools like Net Present Value, Internal Rate of Return and Discounted Pay-back Period.
Though the scope of this presentation involves:-
- Mutually exclusive projects,
- Indivisible Projects, and
- Equal duration projects
More research work is being undertaken for projects of different duration.
Moreover, I'll share more about calculation of Weighted Average cost of capital, ROI and Risk-adjusted ROI in the upcoming presentations.
If you wish to add comments or need to ask questions, please feel free.
Objectives of Capital Budgeting, Importance of Capital Budgeting, Advantages of Capital Budgeting, Disadvantages of Capital Budgeting, Capital Budgeting Process, CAPITAL BUDGETING TECHNIQUES: PAYBACK PERIOD, Advantages Of Pay Back Period (PBP), Disadvantages Of Pay Back Period (PBP), Net present value method, Internal Rate of Return,
This presentation provides an insight into techniques which can help business undertake financially viable projects using Capital Budgeting tools like Net Present Value, Internal Rate of Return and Discounted Pay-back Period.
Though the scope of this presentation involves:-
- Mutually exclusive projects,
- Indivisible Projects, and
- Equal duration projects
More research work is being undertaken for projects of different duration.
Moreover, I'll share more about calculation of Weighted Average cost of capital, ROI and Risk-adjusted ROI in the upcoming presentations.
If you wish to add comments or need to ask questions, please feel free.
Humidity Sensors from the main players analyzed and compared!
Humidity sensors are integrated in many different consumer applications; in each of them different specifications are required. Moreover humidity sensors are integrated in environmental sensors for mobile applications; especially in harsh environment devices. An increase of humidity sensors market is forecasted by next years.
In this report, humidity sensors from different suppliers and different generations are compared in term of technology choice, manufacturing process and cost.
Single-chip and multi-chip devices are compared between suppliers and references evolution.
Size and technology is very different for every player. Nevertheless, the mainly used technology is the capacitive one. Moreover the majority of components are single-chip devices. Some devices, such as Bosch environmental sensor for example, are paving the way for the multichip integration.
The report includes a description of each humidity sensor device and a comprehensive supply chain evaluation. The cost of each device is estimated and compared.
WORKING CAPITAL PRACTICESWORKING CAPITAL PRACTICES.docxericbrooks84875
WORKING CAPITAL PRACTICES
WORKING CAPITAL PRACTICES
Tanelle Peppers
Business 650
Ashford University
WORKING CAPITAL PRACTICESCapital budgeting are the planning methods used by organza tons to decide which of its long Term investments are worth pursuing. Since most organizations are at the moment restructuring Their working capital practices, in order to discover untapped cash sources .The main methods Used for capital budgeting are Internal rate of return, Net present value, Real options analysis, Payback period, Profitability index, and Equivalent annuity.
Net Present Value
It’s used in estimating each potential project's worth using a discounted cash flow valuation. The valuation requires estimating the size and timing of all the incremental cash flows from the project. The NPV is greatly affected by the discount rate, so selecting the proper rate–sometimes called the hurdle rate–is critical to making the right decision.
This should reflect the riskiness of the investment, typically measured by the volatility of cash flows, and must take into account the financing mix. Managers may use models, such as the CAPM or the APT, to estimate a discount rate appropriate for each particular project, and use the weighted average cost of capital (WACC) to reflect the financing mix selected. A common practice in choosing a discount rate for a project is to apply a WACC that applies to the entire firm, but a higher discount rate may be more appropriate when a project's risk is higher than the risk of the firm as a whole.
Internal Rate of Return
The internal rate of return (IRR) is defined as the discount rate that gives a net present value (NPV) of zero. It is a commonly used measure of investment efficiency.
The IRR method will result in the same decision as the NPV method for non-mutually exclusive projects in an unconstrained environment, in the usual cases where a negative cash flow occurs at the start of the project, followed by all positive cash flows. Nevertheless, for mutually exclusive projects, the decision rule of taking the project with the highest IRR, which is often used, may select a project with a lower NPV.
One shortcoming of the IRR method is that it is commonly misunderstood to convey the actual annual profitability of an investment. Accordingly, a measure called "Modified Internal Rate of Return (MIRR)" is often used.
Payback Period
Payback period in capital budgeting refers to the period of time required for the return on an investment to "repay" the sum of the original investment. Payback period intuitively measures how long something takes to "pay for itself.” All else being equal, shorter payback periods are preferable to longer payback periods.
The payback period is considered a method of analysis with serious limitations and qualifications for its use, because it does not account for the time value of money, risk, financing, or other important considerations, such as the opportunity cost.
Profitability Index
Prof.
Chapter- III Techniques of Capital Budgeting
Concept, Significance, Nature and classification of capital budgeting decisions, cash flow computation- Incremental approach; Evaluation criteria- Pay Back Period, ARR, NPV, IRR and PI methods; capital rationing, Capital budgeting under risk and uncertainty.
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
http://sandymillin.wordpress.com/iateflwebinar2024
Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
Knowledge and skills frameworks, generally called competency frameworks, for ELT teachers, trainers and managers have existed for a few years now. However, until I created one for my MA dissertation, there wasn’t one drawing together what we need to know and do to be able to effectively produce language learning materials.
This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
This presentation provides a briefing on how to upload submissions and documents in Google Classroom. It was prepared as part of an orientation for new Sainik School in-service teacher trainees. As a training officer, my goal is to ensure that you are comfortable and proficient with this essential tool for managing assignments and fostering student engagement.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
For more information, visit-www.vavaclasses.com
Embracing GenAI - A Strategic ImperativePeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...Levi Shapiro
Letter from the Congress of the United States regarding Anti-Semitism sent June 3rd to MIT President Sally Kornbluth, MIT Corp Chair, Mark Gorenberg
Dear Dr. Kornbluth and Mr. Gorenberg,
The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
unwillingness to rectify this violation through action requires accountability.
Postsecondary education is a unique opportunity for students to learn and have their ideas and beliefs challenged. However, universities receiving hundreds of millions of federal funds annually have denied
students that opportunity and have been hijacked to become venues for the promotion of terrorism, antisemitic harassment and intimidation, unlawful encampments, and in some cases, assaults and riots.
The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
• The Committee on Oversight and Accountability is investigating the sources of funding and other support flowing to groups espousing pro-Hamas propaganda and engaged in antisemitic harassment and intimidation of students. The Committee on Oversight and Accountability is the principal oversight committee of the US House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X.
• The Committee on Ways and Means has been investigating several universities since November 15, 2023, when the Committee held a hearing entitled From Ivory Towers to Dark Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt Universities, and Terror Financing. The Committee followed the hearing with letters to those institutions on January 10, 202
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
A Strategic Approach: GenAI in EducationPeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
2. Capital budgeting means investment decisions involving fixed assets i.e.,
the long term assets used in production.
According to Lynch " Capital budgeting consists in planning development
of available capital for the purpose of maximizing the long term
profitability of the concern".
In the words of Charles T. Horngreen "Capital budgeting is a long
term planning for making and financing proposed capital outlays".
A firm must anticipate in advance when it needs to go in for new
machinery or to change the existing one. Otherwise, the firm may not
be in a position to take advantage of the demands prevalent in the
market.
Capital budgeting processes can be extremely time-consuming and
expensive if not properly designed.
3. A capital budgeting analysis conducts a test to see if the benefits (i.e.,
cash inflows) are large enough to repay the company for three things:
(1) the cost of the asset,
(2) the cost of financing the asset (e.g., interest, etc.), and
(3) a rate of return (called a risk premium) that compensates the company
for potential errors made when estimating cash flows that will occur in
the distant future.
Following are the most popular techniques for analyzing a capital budgeting
proposal:
1. Payback Period
2. Net Present Value
3. Internal Rate of Return
4. Modified Internal Rate of Return
4. Payback Period is the simplest method to use and is often employed as a
first step in the process of capital budgeting.
By definition, the Payback Period is the length of time it takes to
recover your investment.
For example, to recover Rs.3,00,000 at the rate of Rs.1,00,000 per
year would take 3 years. Companies that use this method will set some
arbitrary payback period for all capital budgeting projects, such as, a
rule that only projects with a payback period of 2.5 years or less will be
accepted. (At a payback period of 3 years in this example, the project
would be rejected.)
The capital project with shortest pay back period tops the list. To
accept or reject the proposed projects, they must be mutually exclusive.
The Payback Period isn't a very good method because it doesn't use the
time value of money principle, making it the weakest of the
methods. However, it is still used by a large number of companies.
5. Using a minimum rate of return known as the hurdle rate, net present value is
the present value of the cash inflows minus the present value of the cash
outflows. It is a technique that uses all of the cash flows into and out of a
project over the project's life.
A more common way of expressing this is to say that the net present value (NPV)
is the present value of the benefits (PVB) minus the present value of the costs
(PVC)
NPV = PVB - PVC
By using the hurdle rate as the discount rate, we are conducting a test to see if
the project is expected to earn our minimum desired rate of return. Here are
our decision rules:
Positive Benefits > Costs Yes, more than Accept
Zero Benefits = Costs Exactly equal to Indifferent
Negative Benefits < Costs No, less than Reject
6. The Internal Rate of Return (IRR) estimates a rate of return for the
project and compares this rate to the company's required rate of
return. It is the rate of return that an investor can expect to earn on
the investment.
According to surveys of businesses, the IRR method is actually the most
commonly used method for evaluating capital budgeting proposals.
If the internal rate of return is greater than the project's minimum
rate of return, we would tend to accept the project.
However, the IRR method does have certain deficiencies:
a) The calculation of the IRR, cannot be determined using a formula; it must be
determined using a trial-and-error technique.
b) The IRR assumes that the cash inflows are reinvested to earn the IRR, while the
NPV method assumes that the project's cash inflows are reinvested to earn the
hurdle rate. Of the two, the NPV's assumption is more realistic in most situations
since the IRR can be very high on some projects.
c) It is possible for the IRR to have more than one solution. If the cash flows
experience a sign change, the IRR method will have more than one solution. The
NPV method does not have this problem.
7. The Modified Internal Rate of Return (MIRR) is an attempt to overcome
the two deficiencies in the IRR method. The person conducting the
analysis can choose whatever rate he or she wants for investing the cash
inflows for the remainder of the project's life.
For example, if the analyst chooses to use the hurdle rate for
reinvestment purposes, the MIRR technique calculates the present value
of the cash outflows (i.e., the PVC), the future value of the cash
inflows (to the end of the project's life), and then solves for the
discount rate that will equate the PVC and the future value of the
benefits. In this way, the two problems mentioned previously are
overcome:
a) the cash inflows are assumed to be reinvested at a reasonable rate chosen by
the analyst, and
b) there is only one solution to the technique.