This document discusses different methods for assessing investment projects, including payback period, average rate of return, and net present value. Payback period calculates the number of years for a project's cash flows to repay the initial investment. Average rate of return measures annual profit as a percentage of the capital cost. Net present value discounts future cash flows to determine their value today relative to the initial investment cost. The document compares the advantages and disadvantages of each method.
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,
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,
Capital budgeting is a process of evaluating investments and huge expenses in order to obtain the best returns on investment.
An organization is often faced with the challenges of selecting between two projects/investments or the buy vs replace decision. Ideally, an organization would like to invest in all profitable projects but due to the limitation on the availability of capital an organization has to choose between different projects/investments.
What are the objectives of Capital budgeting?
Capital expenditures are huge and have a long-term effect. Therefore, while performing a capital budgeting analysis an organization must keep the following objectives in mind:
1. Selecting profitable projects
An organization comes across various profitable projects frequently. But due to capital restrictions, an organization needs to select the right mix of profitable projects that will increase its shareholders’ wealth.
2. Capital expenditure control
Selecting the most profitable investment is the main objective of capital budgeting. However, controlling capital costs is also an important objective. Forecasting capital expenditure requirements and budgeting for it, and ensuring no investment opportunities are lost is the crux of budgeting.
3. Finding the right sources for funds
Determining the quantum of funds and the sources for procuring them is another important objective of capital budgeting. Finding the balance between the cost of borrowing and returns on investment is an important goal of Capital Budgeting.
The following are the two methods:
A) Traditional Method
1. Pay back period method
2. Improvement of traditional approach
3. Rate of Return Method or Accounting Method
B) Time adjusted method or discount methods
4. Net Present Value method
5. Internal Rate of Return Method
6. Profitability Index Method
The slide is about evaluation of investment in projects before starting the project. Useful for Finance Manager, Finance Students, Entrepreneurs and Project Managers
This introductory revision presentation guides students through the concept of basic investment appraisal. It examines the nature of capital investment spending and then outlines three common approaches to investment appraisal: payback period, net present value and accounting rate of return. Some key evaluative points relating to investment appraisal are also discussed.
Capital budgeting is a process of evaluating investments and huge expenses in order to obtain the best returns on investment.
An organization is often faced with the challenges of selecting between two projects/investments or the buy vs replace decision. Ideally, an organization would like to invest in all profitable projects but due to the limitation on the availability of capital an organization has to choose between different projects/investments.
What are the objectives of Capital budgeting?
Capital expenditures are huge and have a long-term effect. Therefore, while performing a capital budgeting analysis an organization must keep the following objectives in mind:
1. Selecting profitable projects
An organization comes across various profitable projects frequently. But due to capital restrictions, an organization needs to select the right mix of profitable projects that will increase its shareholders’ wealth.
2. Capital expenditure control
Selecting the most profitable investment is the main objective of capital budgeting. However, controlling capital costs is also an important objective. Forecasting capital expenditure requirements and budgeting for it, and ensuring no investment opportunities are lost is the crux of budgeting.
3. Finding the right sources for funds
Determining the quantum of funds and the sources for procuring them is another important objective of capital budgeting. Finding the balance between the cost of borrowing and returns on investment is an important goal of Capital Budgeting.
The following are the two methods:
A) Traditional Method
1. Pay back period method
2. Improvement of traditional approach
3. Rate of Return Method or Accounting Method
B) Time adjusted method or discount methods
4. Net Present Value method
5. Internal Rate of Return Method
6. Profitability Index Method
The slide is about evaluation of investment in projects before starting the project. Useful for Finance Manager, Finance Students, Entrepreneurs and Project Managers
This introductory revision presentation guides students through the concept of basic investment appraisal. It examines the nature of capital investment spending and then outlines three common approaches to investment appraisal: payback period, net present value and accounting rate of return. Some key evaluative points relating to investment appraisal are also discussed.
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
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@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
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What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
3. What is investment?
Definitions
Definitions
1. The purchase of capital
1. The purchase of capital
goods
goods
2. Expenditure by a business
2. Expenditure by a business
which is likely to yield a
which is likely to yield a
return in the future
return in the future
4. Capital goods
tools, vehicles,
computers, information
technology, machines
Construction
Spending on new
buildings bought or
constructed
Types of investment
Public sector
investment
About 25% of all
investment, includes
building of schools,
roads, hospitals
Stocks
these include
finished goods and
work in progress
5. To replace
To replace
work out /
work out /
obsolete
obsolete
equipment
equipment
For research
For research
and investment
and investment
Reasons for investment
To grow the
To grow the
business
business
this can be organic
this can be organic
growth or acquisitions
growth or acquisitions
To minimise
To minimise
costs or
costs or
improve quality
improve quality
7. Investment appraisal
Definition
Definition
How a private sector business
How a private sector business
might objectively evaluate an
might objectively evaluate an
investment project to decide:
investment project to decide:
-whether or not it is profitable
-whether or not it is profitable
-make comparisons between
-make comparisons between
different investment projects
different investment projects
8. The basis of investment
appraisal
Compare the capital cost to the net cash flow
Capital cost
amount spent on the investment project
Net cash flow
estimated revenue generated from the project
minus
estimated running costs of the project
9. Payback period
Payback period
the amount of time
the amount of time
it takes for the
it takes for the
project to payback
project to payback
initial outlay
initial outlay
Average rate
Average rate
of return
of return
measures the met
measures the met
return each year as aa
return each year as
percentage of capital
percentage of capital
cost
cost
Methods of appraisal
Net present value
Net present value
what the cash flow or profit earned in
what the cash flow or profit earned in
the future is worth in today’s money
the future is worth in today’s money
10. Estimate net
Estimate net
cash flow
cash flow
Calculate
Calculate
cumulative net
cumulative net
cash flow
cash flow
cash flow in each year
cash flow in each year
adjusted for cost of the
adjusted for cost of the
project
project
Payback period – method 1
Calculate payback period
Calculate payback period
found when cumulative net cash flow is
found when cumulative net cash flow is
zero
zero
11. Task 1
Calculate the cumulative net cash flow and the
payback period from the information given on the
worksheet
12. Find year
Find year
before project
before project
pays back
pays back
Calculate ‘amount
Calculate ‘amount
required’ to
required’ to
payback
payback
equals cumulative cash
equals cumulative cash
flow for that year ==cost
flow for that year cost
of project ––sum of net
of project sum of net
cash flows
cash flows
Payback period – method 2
Add remaining months to
Add remaining months to
year
year
remaining months = amount required /
remaining months = amount required /
net cash flow in year of payback x 12
net cash flow in year of payback x 12
13. Payback - alternative
An alternative ‘formula’ for calculating payback is
Years = last year in which cumulative cash flow is
negative
Months = Last negative cumulative cash flow × 12
Net cash flow in year after
14. Task 2
Calculate cumulative cash flow, total net cash flow
and the payback period for each of the
investment projects on the worksheet
Which investment project would the business
choose using the payback period method of
appraisal?
Can you spot a problem with the payback method
of appraisal?
15. Average rate of return (ARR)
Calculate profit
Calculate profit
from project
from project
==total net cash flow ––
total net cash flow
capital cost
capital cost
Calculate profit
Calculate profit
per annum
per annum
==profit //number of years
profit number of years
project runs for
project runs for
Calculate ARR
Calculate ARR
net return (profit) per annum
ARR =
x 100
Capital outlay (cost)
16. Task 3
Calculate the ARR for the three investment
projects on the worksheet.
Which investment project should the business
choose?
17. Advantages and disadvantages
Advantages
Advantages
allows projects to be compared
allows projects to be compared
clearly shows profitability
clearly shows profitability
can be compared to other uses of funds eg bank
can be compared to other uses of funds eg bank
deposits
deposits
easy to identify opportunity cost
easy to identify opportunity cost
Disadvantages
Disadvantages
does not take into account payback period ––
does not take into account payback period
important where cash flow is an issue
important where cash flow is an issue
does not take account of effect of time on money
does not take account of effect of time on money
eg money received in the future is worth less
eg money received in the future is worth less
than money received today
than money received today
18. Net present value (NPV)
The underlying principle of the NPV technique
is that money received in the future is worth
less that money received today
To understand this idea you should calculate
the compound value of £100 invested over 5
years at a rate of interest of 10%
what is £100 worth in 5 years time?
what is £133 in three year’s time worth
today?
19. Net present value (NPV)
Calculate present
Calculate present
values of annual
values of annual
net cash flows
net cash flows
==discounted net cash
discounted net cash
flows
flows
Sum the
Sum the
present values
present values
(discounted net
(discounted net
cash flows)
cash flows)
Calculate NPV
Calculate NPV
==total present values ––initial cost of investment
total present values initial cost of investment
20. Advantages and disadvantages
Advantages
Advantages
takes account of the value of future earnings
takes account of the value of future earnings
discount rate can be changed to assess different
discount rate can be changed to assess different
risks or changes in financial market conditions
risks or changes in financial market conditions
useful where investments do not generate cash
useful where investments do not generate cash
flows until some time in the future
flows until some time in the future
Disadvantages
Disadvantages
the most complex method of investment appraisal
the most complex method of investment appraisal
unlikely to be used by small businesses
unlikely to be used by small businesses
result is highly dependent on discount rate chosen
result is highly dependent on discount rate chosen
the higher the discount rate, the fewer projects
the higher the discount rate, the fewer projects
are likely to be profitable
are likely to be profitable