Previous <<< Interest Calculations – Numerical Problems Topics in Time Value of Money – Financial Management Next >>> Effective and Nominal Rate of Interest Present Value and Present Value Factor [Watch video for detailed explanation of concept, formula with examples] We define present value as follows: “The amount to be invested today (present value) at […]
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Previous <<< Payback Period, Payback Reciprocal Topics Covered in Capital Budgeting Accounting Rate of Return (ARR) [Watch video for detailed explanation of concept, formula with examples] ARR is the average annual net income (incremental income, ie., the average annual profit after tax) of the project as a percentage of the investment. It is also preferred
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Previous <<< Project Cash Flow – Incremental Cash Flows Topics Covered in Capital Budgeting Next >>> Accounting Rate of Return (ARR) Payback Period – Capital Budgeting Evaluation Techniques [Watch video for detailed explanation of concept, formula with examples] Capital budgeting evaluation techniques are divided into two based on whether or not considering time value of
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Previous <<< Process of Capital Budgeting Topics Covered in Capital Budgeting Next >>> Payback Period, Payback Reciprocal – Capital Budgeting Evaluation Techniques Project Cash Flows [Watch Video for Detailed Explanation] Correct calculation of cash flows is a must for evaluating capital budgeting decisions. It is the initial step in capital budgeting evaluation techniques. Principles you
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Previous <<< Introduction to Capital Budgeting Topics Covered in Capital Budgeting Next >>> Project Cash Flow – Incremental Cash Flows Process or Steps of Capital Budgeting [Watch video for explanation] There are six steps in capital budgeting decisions. They are as follows: 1. Initial Appraisal / Planning 2. Evaluation 3. Selection 4. Implementation 5. Control
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List of Financial Management Chapters Covered Topics Covered in Capital Budgeting Next >>> Process of Capital Budgeting Introduction to Capital Budgeting [Watch Video for Detailed Explanation] Definition of Capital Budgeting Capital Budgeting is the process of evaluating and selecting long term investments. It involves an initial investment or cash outlay in expectation of future benefit.
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Previous <<< Annuity – Present Value and Future Value Topics Covered in Time Value of Money Perpetuity – Present Value [Watch video for detailed explanation of concept and formula and also for different types] Perpetuity is a sequence of cash flows that continues indefinitely. Perpetuity is an annuity in which the periodic payments or receipts
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Previous <<< Effective and Nominal Rate of Interest Topics covered in Time Value of Money Next >>> Perpetuity – Present Value of Perpetuity Annuity – Present Value and Future Value [Watch Video for Detailed Explanation] An annuity is a stream of regular periodic payment made or received for a specific period of time. In annuities
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Previous <<< Present Value and Present Value Factor Topics Covered in Time Value of Money Next >>> Annuity – Present Value of Annuity, Future Value of Annuity Effective and Nominal Rate of Interest [Watch Video for Detailed Explanation of Concept, Formula with Examples] In compound interest case, interest earned in the previous year also earns
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Previous <<< Principle of Consistency in Interest Calculations Topics Covered in Time Value of Money Next >>> Present Value and Present Value Factor Numerical Problems from Interest Calculations [For solutions watch video] Q. 1. A sum of money doubles itself at compound interest in 9 years. In how many years will it becomes 4 times?
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