The presentation covers financial feasibility of projects, payback analysis, NPV analysis or discounted cash flow analysis, IRR analysis, Benefit to cost ratio analysis, B/C pitfalls, ROI
The document discusses dividend policy and provides details about:
1. The meaning of dividend and dividend policy, and factors that affect dividend policy such as ownership considerations, nature of business, and investment opportunities.
2. Different types of dividends including cash dividend, stock dividend, property dividend, and debenture dividend.
3. Dividend policies of 5 major Indian IT companies - Tata Consultancy Services, Wipro, Infosys, HCL Technologies, and Larsen & Toubro Infotech - and their dividend yields for the fiscal year 2013.
This document provides an introduction to financial management. It defines financial management as the activity of acquiring funds at minimum cost and utilizing them optimally to generate returns. It discusses the meaning, functions, nature, scope and objectives of financial management. The key objectives of financial management discussed are profit maximization and wealth maximization. The document also outlines arguments for and against each objective.
This document discusses various capital budgeting techniques, including traditional non-discounting methods like payback period and accounting rate of return, as well as modern discounting techniques like net present value, internal rate of return, and profitability index. It provides formulas and steps for calculating each technique, discusses their advantages and disadvantages, and provides decision criteria for evaluating projects.
Financial Reporting And Analysis Explained.as to why is it important, Who is it important for and the different ways of analyzing a financial statement.
Greenwich University
The document provides information about conducting a feasibility study for a proposed project or business venture. It defines what a feasibility study is, distinguishes it from a business plan, and outlines the typical steps involved in conducting one. These include assessing the technical, financial, market, and organizational feasibility of the project. Key parts of a feasibility study involve analyzing strengths/weaknesses, conducting market research, planning operations, and preparing projected financial statements like an income statement and opening day balance sheet. The overall goal is to objectively determine whether the project is viable and feasible to implement.
risk and return. Defining Return, Return Example, Defining Risk,Determining Expected Return , How to Determine the Expected Return and Standard Deviation, Determining Standard Deviation (Risk Measure), Portfolio Risk and Expected Return Example, Determining Portfolio Expected Return, Determining Portfolio Standard Deviation, Summary of the Portfolio Return and Risk Calculation, Total Risk = Systematic Risk + Unsystematic Risk,
The presentation talks about why is it necessary to carry out Financial appraisal and the different methods to analyse it. It also discusses the steps involved in a financial appraisal of a project.
The document discusses dividend policy and provides details about:
1. The meaning of dividend and dividend policy, and factors that affect dividend policy such as ownership considerations, nature of business, and investment opportunities.
2. Different types of dividends including cash dividend, stock dividend, property dividend, and debenture dividend.
3. Dividend policies of 5 major Indian IT companies - Tata Consultancy Services, Wipro, Infosys, HCL Technologies, and Larsen & Toubro Infotech - and their dividend yields for the fiscal year 2013.
This document provides an introduction to financial management. It defines financial management as the activity of acquiring funds at minimum cost and utilizing them optimally to generate returns. It discusses the meaning, functions, nature, scope and objectives of financial management. The key objectives of financial management discussed are profit maximization and wealth maximization. The document also outlines arguments for and against each objective.
This document discusses various capital budgeting techniques, including traditional non-discounting methods like payback period and accounting rate of return, as well as modern discounting techniques like net present value, internal rate of return, and profitability index. It provides formulas and steps for calculating each technique, discusses their advantages and disadvantages, and provides decision criteria for evaluating projects.
Financial Reporting And Analysis Explained.as to why is it important, Who is it important for and the different ways of analyzing a financial statement.
Greenwich University
The document provides information about conducting a feasibility study for a proposed project or business venture. It defines what a feasibility study is, distinguishes it from a business plan, and outlines the typical steps involved in conducting one. These include assessing the technical, financial, market, and organizational feasibility of the project. Key parts of a feasibility study involve analyzing strengths/weaknesses, conducting market research, planning operations, and preparing projected financial statements like an income statement and opening day balance sheet. The overall goal is to objectively determine whether the project is viable and feasible to implement.
risk and return. Defining Return, Return Example, Defining Risk,Determining Expected Return , How to Determine the Expected Return and Standard Deviation, Determining Standard Deviation (Risk Measure), Portfolio Risk and Expected Return Example, Determining Portfolio Expected Return, Determining Portfolio Standard Deviation, Summary of the Portfolio Return and Risk Calculation, Total Risk = Systematic Risk + Unsystematic Risk,
The presentation talks about why is it necessary to carry out Financial appraisal and the different methods to analyse it. It also discusses the steps involved in a financial appraisal of a project.
Financial Management — objectives — profit maximization, wealth maximization — finance function — role of finance manager — strategic financial management — economic value added — time value of money.
Project appraisal is a process that examines various aspects of a proposed project to determine its viability. It is conducted at two stages: when a project is identified by a firm, and when financial institutions consider financing the project. Project appraisal aims to increase project quality, enhance long-term profitability, and minimize risk. Aspects examined include economic, financial, market, technical, managerial, social, and ecological factors.
This chapter discusses financial planning and forecasting. It covers developing long-term and short-term financial plans, including preparing pro forma income statements, balance sheets, and cash budgets. The cash budget forecasts cash inflows and outflows to determine short-term cash needs. Pro forma statements are used to evaluate future financial performance and determine external financing requirements. Different approaches for preparing these statements are described, along with addressing uncertainties in forecasts.
This document discusses techniques for project appraisal. It outlines key issues to consider in appraising projects such as need, objectives, options, costs, benefits, risks and sustainability. It also describes various analyses used in appraisal, including technical, economic, financial, environmental and social analyses. The main techniques of economic analysis are cost-benefit analysis, cost-effectiveness analysis and multi-criteria analysis. Financial analysis determines funding requirements and expected returns. Common appraisal methods include undiscounted techniques like payback period as well as discounted techniques like net present value, internal rate of return and benefit-cost ratio.
Debt instruments are contracts where one party lends money to another at a predetermined interest rate and repayment schedule. There are various types of bonds like straight bonds, zero coupon bonds, and floating rate bonds. Bond prices are inversely related to yields, and bond values are sensitive to interest rate changes. Duration measures a bond's sensitivity to interest rate risk.
This document discusses various concepts related to investment returns and risk. It begins by defining return as income received plus capital gains. It then discusses the components of return including yield and capital gains. It provides a formula to calculate total return. The document then discusses various types of risk including market risk, liquidity risk, and foreign exchange risk. It also covers sensitivity analysis using range and standard deviation. Finally, it discusses portfolio returns and risks, and introduces the Capital Asset Pricing Model to relate expected returns to market risk.
The document discusses various bond valuation concepts like coupon rate, current yield, spot interest rate, yield to maturity, yield to call, and realized yield. It provides examples to calculate these measures and explains how bond prices are determined based on factors like interest rates, time to maturity, and cash flows. Bond duration is introduced as a measure of interest rate risk exposure, and bond risks from default and changes in interest rates are explained.
The document discusses various aspects of financial markets in India. It begins by defining what comprises the Indian financial market, including the primary market, FDI, alternative investments, banking/insurance/pensions, and asset management. It then provides more details on some of the key components of the Indian financial market, including the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), Over-the-Counter Exchange of India (OTCEI), and the Securities and Exchange Board of India (SEBI) which regulates the securities market. The document concludes by discussing the integration of financial markets, including the benefits of integration such as more efficient price signals, reduced arbitrage opportunities, and increased efficacy of monetary policy.
The document discusses the estimation of cash flows for capital budgeting and expenditure decisions. It defines capital expenditures as long-term investments like purchasing assets that generate cash flows beyond one year. It also discusses the importance of accurately estimating cash flows, the difficulties involved, and the key principles and components to consider when estimating cash flows for capital projects.
Npv and IRR, a link to Project ManagementUjjwal Joshi
This document discusses two key measures for evaluating projects: net present value (NPV) and internal rate of return (IRR). It defines NPV as the difference between the present value of future cash flows from an investment and the initial investment amount. IRR is defined as the discount rate that results in an NPV of zero. The document provides examples of calculating NPV and IRR for projects and outlines the decision rules for accepting or rejecting projects based on whether their NPV is positive or negative and whether their IRR exceeds the cost of capital. It notes that while NPV and IRR typically provide the same decision, there are some exceptions like projects with non-conventional cash flows or mutually exclusive projects.
time value of money
,
concept of time value of money
,
significance of time value of money
,
present value vs future value
,
solve for the present value
,
simple vs compound interest rate
,
nominal vs effective annual interest rates
,
future value of a lump sum
,
solve for the future value
,
present value of a lump sum
,
types of annuity
,
future value of an annuity
The capital structure of a firm refers to how it finances its operations through various sources of funds, including debt through bonds or notes, and equity such as common stock, preferred stock, or retained earnings. Capital structure planning is important for a firm's long-term survival by creating a strong balance sheet and allowing a firm to withstand losses. An optimal capital structure balances debt and equity to lower the cost of capital and maximize firm value. Leverage refers to using assets or funds with fixed costs to magnify earnings, and comes in operating, financial, and combined forms. Operating leverage is concerned with fixed costs in a firm's income, while financial leverage uses debt to potentially increase earnings per share.
This document discusses various techniques for financial forecasting and projections. It provides an overview of preparing pro forma income statements and balance sheets using percentage of sales and budgeted expense methods. An example pro forma income statement and assumptions are presented. Key points covered are sales forecasting techniques, calculating external funding requirements for growth, and preparing other supporting financial projections like cash budgets and operating budgets.
This document discusses the cost of capital. It defines cost of capital as the minimum rate of return that a firm must earn on its investments to maintain its value. Cost of capital has several components, including the return at zero risk, and premiums for business risk and financial risk. The document also discusses the different types of capital like debt, equity and retained earnings, and how to compute the cost of each. It explains weighted average cost of capital is calculated by weighting the costs of different sources of capital by their proportions.
Financial management involves planning and controlling a company's finances to achieve its objectives. It is concerned with raising financial resources and using them effectively. The scope of financial management includes anticipating financial needs, acquiring funds from various sources, allocating funds to purchase assets, appropriating profits, and assessing all financial activities. Capital budgeting is the process of evaluating long-term investments and determining which investments are worth pursuing. There are various techniques used in capital budgeting such as payback period, net present value, internal rate of return, and profitability index. Working capital management involves managing current assets like inventory, accounts receivable, and cash as well as current liabilities to ensure the company can continue operating and meet short-term obligations.
Investment appraisal is a means of assessing whether an investment project is worthwhile. It involves analyzing factors such as payback period, accounting rate of return, internal rate of return, profitability index, and net present value. Net present value discounts future cash flows to account for the time value of money and allows comparison of investments. Firms use these techniques to evaluate potential investments and determine which projects to pursue.
Cash and marketable securities managementNikhil Soares
Cash management and marketable securities are key areas of working capital management. Cash is held for transactional, precautionary and speculative motives to meet routine payments and unexpected needs. The objectives of cash management are to meet payment schedules while minimizing idle cash balances. Factors determining cash needs include synchronizing cash inflows and outflows, costs of shortfalls, and excess cash balances. Marketable securities alternatives that provide liquidity include treasury bills, commercial paper, certificates of deposit, bankers' acceptances, money market funds and intercorporate deposits.
This document provides an overview of key concepts in investment analysis and portfolio management. It discusses what constitutes an investment, factors that influence required rates of return such as time value of money, inflation, and risk. It also covers measures of historical and expected rates of return, risk of expected returns using variance and standard deviation, and the three determinants of required rates of return - the real risk-free rate, expected inflation, and risk premium.
The document provides information about financial reporting and annual reports for companies. It discusses key components of annual reports including the director's report, financial statements, audit report, income statement, balance sheet, cash flow statement, and statement of owner's equity. It also covers notes to the financial statements, stakeholders' interests in financial statements, qualities and limitations of financial statements, responsibilities for financial statements, misleading financial statements, and consequences of unreliable financial statements.
Capital budgeting is the process of analyzing projects and determining which to include in the capital budget. It involves evaluating long-term investment projects involving large capital outlays. There are various evaluation criteria used for capital budgeting including net present value (NPV), internal rate of return (IRR), payback period, discounted payback period, and profitability index. Generally, NPV is considered the best method but companies often consider multiple criteria as each provides different relevant information for decision making.
Financial Management — objectives — profit maximization, wealth maximization — finance function — role of finance manager — strategic financial management — economic value added — time value of money.
Project appraisal is a process that examines various aspects of a proposed project to determine its viability. It is conducted at two stages: when a project is identified by a firm, and when financial institutions consider financing the project. Project appraisal aims to increase project quality, enhance long-term profitability, and minimize risk. Aspects examined include economic, financial, market, technical, managerial, social, and ecological factors.
This chapter discusses financial planning and forecasting. It covers developing long-term and short-term financial plans, including preparing pro forma income statements, balance sheets, and cash budgets. The cash budget forecasts cash inflows and outflows to determine short-term cash needs. Pro forma statements are used to evaluate future financial performance and determine external financing requirements. Different approaches for preparing these statements are described, along with addressing uncertainties in forecasts.
This document discusses techniques for project appraisal. It outlines key issues to consider in appraising projects such as need, objectives, options, costs, benefits, risks and sustainability. It also describes various analyses used in appraisal, including technical, economic, financial, environmental and social analyses. The main techniques of economic analysis are cost-benefit analysis, cost-effectiveness analysis and multi-criteria analysis. Financial analysis determines funding requirements and expected returns. Common appraisal methods include undiscounted techniques like payback period as well as discounted techniques like net present value, internal rate of return and benefit-cost ratio.
Debt instruments are contracts where one party lends money to another at a predetermined interest rate and repayment schedule. There are various types of bonds like straight bonds, zero coupon bonds, and floating rate bonds. Bond prices are inversely related to yields, and bond values are sensitive to interest rate changes. Duration measures a bond's sensitivity to interest rate risk.
This document discusses various concepts related to investment returns and risk. It begins by defining return as income received plus capital gains. It then discusses the components of return including yield and capital gains. It provides a formula to calculate total return. The document then discusses various types of risk including market risk, liquidity risk, and foreign exchange risk. It also covers sensitivity analysis using range and standard deviation. Finally, it discusses portfolio returns and risks, and introduces the Capital Asset Pricing Model to relate expected returns to market risk.
The document discusses various bond valuation concepts like coupon rate, current yield, spot interest rate, yield to maturity, yield to call, and realized yield. It provides examples to calculate these measures and explains how bond prices are determined based on factors like interest rates, time to maturity, and cash flows. Bond duration is introduced as a measure of interest rate risk exposure, and bond risks from default and changes in interest rates are explained.
The document discusses various aspects of financial markets in India. It begins by defining what comprises the Indian financial market, including the primary market, FDI, alternative investments, banking/insurance/pensions, and asset management. It then provides more details on some of the key components of the Indian financial market, including the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), Over-the-Counter Exchange of India (OTCEI), and the Securities and Exchange Board of India (SEBI) which regulates the securities market. The document concludes by discussing the integration of financial markets, including the benefits of integration such as more efficient price signals, reduced arbitrage opportunities, and increased efficacy of monetary policy.
The document discusses the estimation of cash flows for capital budgeting and expenditure decisions. It defines capital expenditures as long-term investments like purchasing assets that generate cash flows beyond one year. It also discusses the importance of accurately estimating cash flows, the difficulties involved, and the key principles and components to consider when estimating cash flows for capital projects.
Npv and IRR, a link to Project ManagementUjjwal Joshi
This document discusses two key measures for evaluating projects: net present value (NPV) and internal rate of return (IRR). It defines NPV as the difference between the present value of future cash flows from an investment and the initial investment amount. IRR is defined as the discount rate that results in an NPV of zero. The document provides examples of calculating NPV and IRR for projects and outlines the decision rules for accepting or rejecting projects based on whether their NPV is positive or negative and whether their IRR exceeds the cost of capital. It notes that while NPV and IRR typically provide the same decision, there are some exceptions like projects with non-conventional cash flows or mutually exclusive projects.
time value of money
,
concept of time value of money
,
significance of time value of money
,
present value vs future value
,
solve for the present value
,
simple vs compound interest rate
,
nominal vs effective annual interest rates
,
future value of a lump sum
,
solve for the future value
,
present value of a lump sum
,
types of annuity
,
future value of an annuity
The capital structure of a firm refers to how it finances its operations through various sources of funds, including debt through bonds or notes, and equity such as common stock, preferred stock, or retained earnings. Capital structure planning is important for a firm's long-term survival by creating a strong balance sheet and allowing a firm to withstand losses. An optimal capital structure balances debt and equity to lower the cost of capital and maximize firm value. Leverage refers to using assets or funds with fixed costs to magnify earnings, and comes in operating, financial, and combined forms. Operating leverage is concerned with fixed costs in a firm's income, while financial leverage uses debt to potentially increase earnings per share.
This document discusses various techniques for financial forecasting and projections. It provides an overview of preparing pro forma income statements and balance sheets using percentage of sales and budgeted expense methods. An example pro forma income statement and assumptions are presented. Key points covered are sales forecasting techniques, calculating external funding requirements for growth, and preparing other supporting financial projections like cash budgets and operating budgets.
This document discusses the cost of capital. It defines cost of capital as the minimum rate of return that a firm must earn on its investments to maintain its value. Cost of capital has several components, including the return at zero risk, and premiums for business risk and financial risk. The document also discusses the different types of capital like debt, equity and retained earnings, and how to compute the cost of each. It explains weighted average cost of capital is calculated by weighting the costs of different sources of capital by their proportions.
Financial management involves planning and controlling a company's finances to achieve its objectives. It is concerned with raising financial resources and using them effectively. The scope of financial management includes anticipating financial needs, acquiring funds from various sources, allocating funds to purchase assets, appropriating profits, and assessing all financial activities. Capital budgeting is the process of evaluating long-term investments and determining which investments are worth pursuing. There are various techniques used in capital budgeting such as payback period, net present value, internal rate of return, and profitability index. Working capital management involves managing current assets like inventory, accounts receivable, and cash as well as current liabilities to ensure the company can continue operating and meet short-term obligations.
Investment appraisal is a means of assessing whether an investment project is worthwhile. It involves analyzing factors such as payback period, accounting rate of return, internal rate of return, profitability index, and net present value. Net present value discounts future cash flows to account for the time value of money and allows comparison of investments. Firms use these techniques to evaluate potential investments and determine which projects to pursue.
Cash and marketable securities managementNikhil Soares
Cash management and marketable securities are key areas of working capital management. Cash is held for transactional, precautionary and speculative motives to meet routine payments and unexpected needs. The objectives of cash management are to meet payment schedules while minimizing idle cash balances. Factors determining cash needs include synchronizing cash inflows and outflows, costs of shortfalls, and excess cash balances. Marketable securities alternatives that provide liquidity include treasury bills, commercial paper, certificates of deposit, bankers' acceptances, money market funds and intercorporate deposits.
This document provides an overview of key concepts in investment analysis and portfolio management. It discusses what constitutes an investment, factors that influence required rates of return such as time value of money, inflation, and risk. It also covers measures of historical and expected rates of return, risk of expected returns using variance and standard deviation, and the three determinants of required rates of return - the real risk-free rate, expected inflation, and risk premium.
The document provides information about financial reporting and annual reports for companies. It discusses key components of annual reports including the director's report, financial statements, audit report, income statement, balance sheet, cash flow statement, and statement of owner's equity. It also covers notes to the financial statements, stakeholders' interests in financial statements, qualities and limitations of financial statements, responsibilities for financial statements, misleading financial statements, and consequences of unreliable financial statements.
Capital budgeting is the process of analyzing projects and determining which to include in the capital budget. It involves evaluating long-term investment projects involving large capital outlays. There are various evaluation criteria used for capital budgeting including net present value (NPV), internal rate of return (IRR), payback period, discounted payback period, and profitability index. Generally, NPV is considered the best method but companies often consider multiple criteria as each provides different relevant information for decision making.
The document discusses various topics related to investment decisions and capital budgeting. It defines capital expenditures and discusses factors like cost of acquisition, addition/expansion costs, and R&D costs. It also summarizes various capital budgeting techniques like payback period, accounting rate of return, net present value, internal rate of return, and profitability index. Key evaluation criteria for investment decisions include NPV, IRR, and reconsider assumptions. The document also highlights potential conflicts between NPV and IRR methods.
The discounted payback period is 3 years. In year 3, the cumulative discounted cash flows of $3,636 + $3,719 + $7,513 = $14,868 exceeds the initial investment of $10,000.
Capital budgeting is the process of allocating funds to long-term capital projects. It involves 4 steps: generating ideas, analyzing proposals, planning the capital budget, and monitoring projects. Key principles include basing decisions on cash flows, considering the timing of cash flows, and only including incremental cash flows. Common criteria for evaluating projects are net present value, internal rate of return, payback period, and profitability index. The net present value profile graphically shows how a project's NPV changes with the required rate of return.
Capital budgeting involves planning expenditures for long-term assets that provide returns over several years. It is an important process that requires evaluating projects carefully due to their large size, long-term implications, and irreversible nature. Key aspects of capital budgeting include identifying and evaluating investment proposals, determining which provide the highest expected rates of return, and preparing a capital expenditure budget. Various techniques can be used to evaluate projects, including payback period, accounting rate of return, net present value, internal rate of return, and risk-adjusted methods that account for uncertainty in projected cash flows.
Capital Budgeting Techniques (Investment Decision Rules) (Measuring Return on Investment)
This document discusses various capital budgeting techniques used to evaluate long-term investment projects, including net present value (NPV), internal rate of return (IRR), payback period (PP), discounted payback period (DPP), and profitability index (PI). It provides examples of how to calculate these metrics and compares their strengths and weaknesses in accepting or rejecting investment projects.
- The document discusses various methods for evaluating the profitability and desirability of potential investment ventures, including net present value (NPV), internal rate of return (IRR), payback period, and discounted cash flow rate of return (DCFROR).
- It provides examples of calculating these metrics for projects with cash flows over multiple time periods, including determining the IRR through trial-and-error calculations.
- Present value profiles, which plot NPV against discount rates, can help compare projects and identify the IRR at which a project's NPV equals zero.
This document discusses various capital budgeting techniques used to evaluate potential major projects or investments. It describes traditional non-discounted methods like payback period and accounting rate of return. It also explains discounted cash flow methods like net present value (NPV), profitability index, and internal rate of return (IRR). For each method, it provides examples to demonstrate how to calculate them and how they are used to evaluate projects. The key information is that capital budgeting evaluates the potential cash flows of projects to determine if returns meet benchmarks and whether projects should be accepted or rejected.
Capital budgeting is the process of evaluating long-term investments to maximize shareholder wealth. It involves assessing projects that require fixed assets operating for over one year. The key evaluation techniques are payback period, net present value (NPV), and internal rate of return (IRR), with NPV preferred as it considers total cash flows over time. NPV accepts projects when the present value of inflows exceeds outflows, while IRR accepts projects when the rate of return exceeds the cost of capital.
Enhance your audiences knowledge with this well researched complete deck. Showcase all the important features of the deck with perfect visuals. This deck comprises of total of twenty three slides with each slide explained in detail. Each template comprises of professional diagrams and layouts. Our professional PowerPoint experts have also included icons, graphs and charts for your convenience. All you have to do is DOWNLOAD the deck. Make changes as per the requirement. Yes, these PPT slides are completely customizable. Edit the colour, text and font size. Add or delete the content from the slide. And leave your audience awestruck with the professionally designed Financial Expense PowerPoint Presentation Slides complete deck. http://bit.ly/31tQk6l
Fixed Capital Evaluation To Improve Business Growth Powerpoint Presentation S...SlideTeam
This document discusses evaluating fixed capital requirements to improve business growth. It includes an agenda covering assessing fixed capital performance, understanding needs for land, buildings, and machinery, and evaluating expansion and replacement needs. Techniques to be considered include net present value, internal rate of return, payback period. The implementation plan involves inventorying assets, assessing conditions, establishing maintenance plans, identifying failure impacts, and developing optimization and funding strategies. Software can help manage assets, reduce downtime, and provide project snapshots and depreciation methods. Dashboards can track asset values across categories.
This document discusses various capital budgeting techniques used to evaluate business investment projects, including net present value (NPV), internal rate of return (IRR), profitability index (PI), payback period, and average rate of return (ARR). It provides examples of how to calculate each metric and explains the appropriate decision rules and limitations of each approach.
The document discusses various capital budgeting techniques used to evaluate investment projects, including:
1) The cash payback period method which calculates the years to recover initial costs from annual cash flows.
2) The net present value method which discounts future cash flows to determine if a project's present value exceeds costs.
3) The internal rate of return method which calculates the discount rate that sets a project's present value of cash flows equal to its costs.
4) The annual rate of return and profitability index methods which evaluate profitability as a percentage of investment size. Post-audits of actual results are recommended to improve future investment analyses.
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 used to evaluate long-term investment projects. There are two types of capital budgeting decisions - screening decisions determine if a project meets an acceptance standard, and preference decisions select among competing options. Common evaluation methods include payback period, net present value (NPV), and internal rate of return. NPV discounts future cash flows to determine if a project's present value of cash inflows exceeds the present value of cash outflows.
Any incorporated company at the end of the financial year is required to prepare financial statements showing the assets & liabilities, profit or loss for the period, a cash flow statement &get it audited. the audited statements along with the auditor's report & directors report with all schedules is to be submitted to the ROC, shareholders at the annual general meeting, banks, financial institutions, all stakeholders.etc
These statements form the basis of ANALYSIS, WHICH CAN BE (A) VERTICAL ANALYSIS ( B)HORIZONTAL ANALYSIS (C )COMPARITIVE STATEMENTS (D)COST ANALYSIS (E)CASH FLOW ANALYSIS AND SO ON 'The main feature of these analyses will be explained with illustrative examples
This document discusses various investment criteria used to evaluate capital budgeting projects. It covers net present value, benefit-cost ratio, internal rate of return, payback period, and accounting rate of return. Formulas are provided for calculating each method along with their pros and cons. The key steps in investment evaluation are estimating costs and benefits, assessing risk, calculating the cost of capital, and using these criteria to determine if a project is worthwhile.
The document discusses various economic criteria for selecting projects, including net present value (NPV), internal rate of return (IRR), payback period, benefit-cost ratio, sunk costs, opportunity costs, depreciation, and economic value added (EVA). It provides examples and definitions for each concept. Various capital budgeting techniques are examined, including present value calculations. Methods for calculating depreciation such as straight-line, double declining balance, and sum of years digits are also summarized.
The presentation covers asynchronous sequential circuit analysis; Map, transition table, flow table. It also covers asynchronous circuit design process and race conditions
synchronous Sequential circuit counters and registersDr Naim R Kidwai
The presentation covers, synchronous sequential circuits; registers and counters. design of registers, shift registers are explained. Design of counter, synchronous and ripple counter is demostrated.
The presentation covers clocked sequential circuit analysis and design process demonstrated with example. State reduction and state assignment is design is also described.
The presentation covers synchronous sequential circuit elements; latch and Flip flops, SR Flip flop, JK Flip flop, T flip flop, D Flip flop, race around condition, Edge triggered flip flop
The presentation covers sampling theorem, ideal sampling, flat top sampling, natural sampling, reconstruction of signals from samples, aliasing effect, zero order hold, upsampling, downsampling, and discrete time processing of continuous time signals.
The presentation covers infrastructure project financing, typical configurations, key project parties, project contracts, It explains financing of a power project, security mechanism, SPV payment hierarchy and risk mitigation mechanism
The presentation covers project financing, capital structure, key factors in determining debt equity ratio, menu of financing, sources of capital, internal accruals, equity capital, preference capital, debenture or bonds, methods of offering, term loan, working capital advances, project financing structures,
The presentation covers project constraints: project dependence, capital rationing, project invisibility. It covers comparing project under constraints: methods of ranking, ranking conflicts,
The document discusses various techniques for risk analysis in project finance, including sensitivity analysis, scenario analysis, break-even analysis, and simulation analysis. It defines key risk analysis terms and provides examples of calculating expected net present value and standard deviation of NPV using the Hiller model under both uncorrelated and perfectly correlated cash flows. Simulation analysis involves modeling the relationship between variable factors and NPV, specifying probability distributions, running simulations to obtain multiple NPV outcomes, and analyzing the results. Project selection under risk may involve judgmental evaluation, payback period requirements, or risk-adjusted discount rates.
Nec 602 unit ii Random Variables and Random processDr Naim R Kidwai
The presentation explains concept of Probability, random variable, statistical averages, correlation, sum of random Variables, Central Limit Theorem,
random process, classification of random processes, power spectral density, multiple random processes.
This document discusses various spread spectrum communication techniques including frequency hopping spread spectrum (FHSS), direct sequence spread spectrum (DSSS), code division multiple access (CDMA), multiuser detection, and orthogonal frequency division multiplexing (OFDM). It provides examples and explanations of how each technique works, along with their advantages such as interference suppression, low power operation, multiple access capability, and information security provided by codes. Hedy Lamarr is credited with inventing spread spectrum technology during World War II to prevent jamming of radio controlled torpedoes.
The presentation describes Measures of Information, entropy, source coding, source coding theorem, huffman coding, shanon fano coding, channel capacity theorem, capacity of a discrete and continuous memoryless channel, Error Free Communication over a Noisy Channel
Rec101 unit ii (part 2) bjt biasing and re modelDr Naim R Kidwai
This document discusses biasing of bipolar junction transistors (BJTs) including different biasing configurations such as fixed bias, emitter bias, voltage divider bias, and collector feedback. It explains how setting the operating or quiescent point on the transistor characteristics curve is important for proper amplification. The concepts of cutoff, saturation and active regions are covered. Equations for analyzing common emitter, common base and common collector configurations are provided. An example calculation of the collector current and voltage at the operating point is shown. Finally, bias stability and factors affecting it are briefly discussed.
The presentation covers, Field Effect Transistor: Construction and Characteristic of JFETs, dc biasing of CS, ac analysis of CS amplifier, MOSFET (Depletion and Enhancement)Type, Transfer Characteristic
The presentation covers Bipolar Junction Transistor: Construction, Operation, Transistor configurations and input / output characteristics; Common Base, Common Emitter, and Common Collector
The presentation explains elements of communication system, need of the modulation, types of modulation, basic signals, fundamentals of amplitude modulation/ demodulation, envelope detector, DSB_SC, SSB, VSB and comparison of modulation techniques
The presentation covers digital Voltmeter, RAMP Techniques, digital Multi-meters. It also covers Oscilloscope; Introduction and Basic Principle, CRT, Measurement of voltage, current, phase and frequency using CRO, Introduction of Digital Storage Oscilloscope and its comparison over analogue CRO
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.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
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.
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Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
2. Tools for financial feasibility analysis
• Payback period analysis
At what point of time we are making more money than we are spending ?
• Benefit cost ratio analysis
For each rupee how much will be generated?
• Net Present value analysis
How much is future revenue (or expenditure) flow worth in today ?
• Internal rate of return (IRR) analysis
rate of return on our investment for a fixed period, during which time we
are spending money and making money
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3. Payback Analysis
• A viable project is one that is able to pay back the original investment as early as
possible.
• The payback period is achieved at that point in time when cumulative cash inflows
more than offset cumulative outflows,
or
When we are finally making more money in total than we have spent in total.
• Payback period indicates when, our investment is out of the woods.
• Projects with long payback are less attractive than those with short payback.
- they tie up capital longer, not enabling its use for other productive purposes.
- they are generally riskier than those with short payback periods
as over a long stretch of time, many things can go wrong.
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4. Payback Analysis
• As per payback period, project A is more attractive
19-04-2018 BCH 505 Project Finance by Dr Naim R Kidwai 4
Project A
Year Outflows
Cumulative
out flows
Inflows
Cumulative
In flows
1 200 200 100 100
2 200 400 300 400
3 100 500 300 700
4 500 300 1000
5 500 300 1300
Total 500 1300
Project B
Year Outflows
Cumulative
out flows
Inflows
Cumulative
In flows
1 200 200 100 100
2 200 400 100 200
3 100 500 200 400
4 500 400 800
5 500 500 1300
Total 500 1300
5. Net Present Value (NPV) Analysis
or Discounted cash flows analysis
• the late 1970s, Americans experienced inflation rates in the 17% per annum range
• Inflation provides one example of what is called the time value of money i.e. A
rupee today has a different value than a rupee one year from now.
• There is more to time value of money than the force of inflation.
• Consider if no inflation, i.e a rupee today has the same purchasing power as a
rupee one year later.
If you have an opportunity to lend Rs 1,000/- to a business at a 10% interest yearly
then at year end you will receive a payment of Rs 1,100/- at the year end when the
loan is paid off.
Your initial investment of Rs 1,000/- has grown by 10% over time.
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6. Net Present Value (NPV) Analysis
or Discounted cash flows analysis
• FV =PV (1+r)n
where r is interest rate fraction and n is number of completed time slots
Inflation provides one example of what is called the time value of money i.e. A rupee
today has a different value than a rupee one year from now.
• There is more to time value of money than the force of inflation.
• Consider if no inflation, i.e a rupee today has the same purchasing power as a
rupee one year later.
If you have an opportunity to lend Rs 1,000/- to a business at a 10% interest yearly
then at year end you will receive a payment of Rs 1,100/- at the year end when the
loan is paid off.
Your initial investment of Rs 1,000/- has grown by 10% over time.
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7. Net Present Value (NPV) Analysis
• Project A is more attractive
than Project B, because its
true, discounted profit (Rs
533.18) is greater than the
discounted profit of Project B
(Rs 485.24).
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Project A
Year Outflows Inflows
Discounting
factor @ 10%
PV of
out flows
PV of
In flows
PV of
Net flows
1 200 100 0.9091 181.82 90.91 -90.91
2 200 300 0.8264 165.28 247.92 82.64
3 100 300 0.7513 75.13 225.39 150.26
4 300 0.683 0 204.9 204.9
5 300 0.6209 0 186.27 186.27
Total 500 1300 422.23 955.39 533.16
Project B
Year OutflowsInflows
Discounting
factor @ 10%
PV of
out flows
PV of
In flows
PV of
Net flows
1 200 100 0.9091 181.82 90.91 -90.91
2 200 100 0.8264 165.28 82.64 -82.64
3 100 200 0.7513 75.13 150.26 75.13
4 400 0.683 0 273.2 273.2
5 500 0.6209 0 310.45 310.45
Total 500 1300 422.23 907.46 485.23
8. Net Present Value (NPV) Analysis
• Both projects have
same NPV
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Project A
Year Outflows Inflows
Discounting
factor @ 10%
PV of
out flows
PV of
In flows
PV of
Net flows
1 200 0.9091 181.82 0 -181.82
2 200 0.8264 165.28 0 -165.28
3 100 100 0.7513 75.13 75.13 0
4 200 0.683 0 136.6 136.6
5 500 0.6209 0 310.45 310.45
Total 500 800 422.23 522.18 99.95
Project B
Year OutflowsInflows
Discounting
factor @ 10%
PV of
out flows
PV of
In flows
PV of
Net flows
1 50 0.9091 45.455 0 -45.46
2 200 0.8264 165.28 0 -165.28
3 200 100 0.7513 150.26 75.13 -75.13
4 89.65 200 0.683 61.23095 136.6 75.37
5 500 0.6209 0 310.45 310.45
Total 539.65 800 422.226 522.18 99.95
9. Internal rate of return(IRR) Analysis
• Both projects have same NPV
• By Excel function IRR of project
A is 14 % and Project B is 12 %
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Project A
Year Outflows Inflows
Discounting
factor @ 10%
PV of
out flows
PV of
In flows
PV of
Net flows
1 -200 0.9091 181.82 0 -181.82
2 -200 0.8264 165.28 0 -165.28
3 -100 100 0.7513 75.13 75.13 0
4 200 0.683 0 136.6 136.6
5 500 0.6209 0 310.45 310.45
Total -500 800 422.23 522.18 99.95
Project B
Year Outflows Inflows
Discounting
factor @ 10%
PV of
out flows
PV of
In flows
PV of
Net flows
1 -50 0.9091 45.455 0 -45.46
2 -200 0.8264 165.28 0 -165.28
3 -200 100 0.7513 150.26 75.13 -75.13
4 -89.65 200 0.683 61.23095 136.6 75.37
5 500 0.6209 0 310.45 310.45
Total -539.65 800 422.226 522.18 99.95
10. Internal rate of return(IRR) Analysis
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Project A discounting @ 15 %
Year Outflows Inflows
Discounting
factor @ 15%
PV of
out flows
PV of
In flows
PV of
Net flows
1 200 0.8696 -173.92 0 -173.92
2 200 0.7561 -151.22 0 -151.22
3 100 100 0.6575 -65.75 65.75 0
4 200 0.5718 0 114.36 114.36
5 500 0.4972 0 248.6 248.6
Total 500 800 -390.89 428.71 37.82
Project B discounting @ 15 %
Year Outflows Inflows
Discounting
factor @ 15%
PV of
out flows
PV of
In flows
PV of
Net flows
1 50 0.8696 -43.48 0 -43.48
2 200 0.7561 -151.22 0 -151.22
3 200 100 0.6575 -131.5 65.75 -65.75
4 89.65 200 0.5718 -51.2619 114.36 63.1
5 500 0.4972 0 248.6 248.6
Total 539.65 800 -377.462 428.71 51.25
Project A discounting @ 20 %
Year Outflows Inflows
Discounting
factor @ 20%
PV of
out flows
PV of
In flows
PV of
Net flows
1 200 0.8333 -166.66 0 -166.66
2 200 0.6944 -138.88 0 -138.88
3 100 100 0.5787 -57.87 57.87 0
4 200 0.4823 0 96.46 96.46
5 500 0.4019 0 200.95 200.95
Total 500 800 -363.41 355.28 -8.13
Project B discounting @ 20 %
Year Outflows Inflows
Discounting
factor @ 20%
PV of
out flows
PV of
In flows
PV of
Net flows
1 50 0.8333 -41.665 0 -41.67
2 200 0.6944 -138.88 0 -138.88
3 200 100 0.5787 -115.74 57.87 -57.87
4 89.65 200 0.4823 -43.2382 96.46 53.22
5 500 0.4019 0 200.95 200.95
Total 539.65 800 -339.523 355.28 15.76
11. Internal rate of return(IRR) Analysis
• IRR of Project A is 19% and of
Project B is 23 %
• a project's IRR is higher than the
prevailing interest rate, then it
may be smart to invest in it.
• IRR model assumes that money
employed is utilized all the time
and is not remain unutilized at all.
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Project A
Year Outflows Inflows
Discounting
factor @ 19%
PV of
out flows
PV of
In flows
PV of
Net flows
1 -200 0.8403 -168.06 0 -168.06
2 -200 0.7062 -141.24 0 -141.24
3 -100 100 0.5934 -59.34 59.34 0
4 200 0.4987 0 99.74 99.74
5 500 0.419 0 209.5 209.5
Total -500 800 -368.64 368.58 -0.06
Project B
Year Outflows Inflows
Discounting
factor @ 10%
PV of
out flows
PV of
In flows
PV of
Net flows
1 -50 0.813 -40.65 0 -40.65
2 -200 0.661 -132.2 0 -132.2
3 -200 100 0.5374 -107.48 53.74 -53.74
4 -89.65 200 0.4369 -39.1681 87.38 48.21
5 500 0.3552 0 177.6 177.6
Total -539.65 800 -319.498 318.72 -0.78
12. Benefit to Cost ratio
The benefit-cost ratio is nothing more than a measure of benefit divided by a measure of cost.
Measure of benefit can be anything: financial profit/ cost savings, happiness, error reduction,
throughput time, and so on.
Practically, the measure of benefit is revenue - or in non- revenue generating situations, cost
savings.
Benefit-cost ratio (B/C) > 1.0 Revenue is greater than expenditures. i.e. investment is
profitable.
Benefit-cost ratio (B/C) = 1.0. Revenue and expenditures offset each other.
Consequently, you are facing a breakeven situation.
Benefit-cost ratio (BE) < 1.0. In this case, expenditures outstrip revenue. You are losing money.
Example: BIC = Rs 40,000/Rs 50,000 = 0.8 Interpretation: For each dollar you are spending on
this project, you are only gaining 80 cents of revenue. Thus you are losing money.
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13. Benefit to Cost ratio
Discounted B/C for project A
= 428.71/390.89 =1.09
Discounted B/C for project B
= 428.71/377.46 =1.14
B/C for project A = 800/500 =1.6
B/C for project B = 800/539.65 =1.48
Benefit-cost ratio analysis using discounted
cash flow data, the computing what in
finance is called the profitability index.
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Project A
Year Outflows Inflows
Discounting
factor @ 15%
PV of
out flows
PV of
In flows
PV of
Net flows
1 200 0.8696 173.92 0 -173.92
2 200 0.7561 151.22 0 -151.22
3 100 100 0.6575 65.75 65.75 0
4 200 0.5718 0 114.36 114.36
5 500 0.4972 0 248.6 248.6
Total 500 800 390.89 428.71 37.82
Project B
Year Outflows Inflows
Discounting
factor @ 15%
PV of
out flows
PV of
In flows
PV of
Net flows
1 50 0.8696 43.48 0 -43.48
2 200 0.7561 151.22 0 -151.22
3 200 100 0.6575 131.5 65.75 -65.75
4 89.65 200 0.5718 51.26 114.36 63.1
5 500 0.4972 0 248.6 248.6
Total 539.65 800 377.46 428.71 51.25
14. Benefit to Cost ratio for non-revenue generating
project
Many projects that are carried out are not revenue generating
Ex. . a typical information technology (IT) project in an organization
This can improve revenue performance indirectly, as the organization reduces
operating costs. But it is not directly tied to generating revenue
Benefit-cost ratio analysis for this involves cost saving instead of revenue generation.
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15. B/C ratio : pitfalls
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There are a number of pitfalls associated with benefit-cost analyses that are
important to know.
B/C ratios do not provide information on the size of the numbers being reviewed.
EX: Project A BIC = 3.1 Project B BIC = 2.7 Project A's is
better
Project A BIC = 3100/1000 = 3.1 Project B BIC = 2,700,000/1,000,000 = 2.7
• Since B/C is a ratio, sense of the size of the numbers vanishes. For most
organizations, Project B is more attractive than A, as B has substantial revenue.
• For valid comparisons among the B/C ratios of different projects, One must know
the actual size of the numbers that are used to compute the ratios.
16. B/C ratio : pitfalls
1. B/C ratios do not provide information on when payback occurs. Consider the following
two ratios: Project A B/C = 3.1 Project B B/C = 2.7
Again, Project A appears to be more attractive than Project B.
If Project A realizes a B/C of 3.1 after five years, it is less attractive than Project B, if
B realizes its B/C ratio in two years.
2. The easiest quantitative data to acquire is basic business data derived from estimated
budgets and, possibly, on anticipated revenues. Hard-to-measure factors are often ignored
when computing the ratios. For example, the main benefit of a project may be what is
called a second-order benefit - e.g., this project, while not profitable in itself, will provide
the groundwork for major revenue streams generated on future projects.
Another benefit might be improved public perceptions of the company's activities.
None of these pitfalls is fatal. With B/C, analysts should be aware of their existence and
should strive to deal with them so that the analyses are valid.
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17. Return on Investment (ROI)
The ROI is nothing more than a measure of NPV expressed as percentage of present
value of cost.
ROI = (NPV/PV of cost)x 100= (discounted B/C -1)x 100
ROI> 0 Revenue is greater than expenditures. i.e. investment is profitable.
ROI= 0. Revenue and expenditures offset each other.
Consequently, you are facing a breakeven situation.
ROI< 0. In this case, expenditures outstrip revenue. You are losing money.
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18. Thank You
19-04-2018 BCH 505 Project Finance by Dr Naim R Kidwai 18
Contact
Email: naimkidwai@gmail.com
https://nrkidwai.wordpress.com/