## NPV vs IRR

NPV vs IRR Every business comes across a number of decisions to be made on a daily basis regarding making investments in different projects. However, making these investments requires a…

## NPV Decision Rule | Capital Budgeting Techniques

NPV Decision Rules - Capital Budgeting Techniques Net Present Value is defined as the present value of all expected cash flows generated by the project minus present value of the…

## Project Analysis | Capital Budgeting Techniques

Project Analysis - Capital Budgeting Techniques Net Present Value Example We are considering following project for investment purpose. Initial cost of the project: $800,000 Project Life:…

## How to Calculate NPV | Capital Budgeting Techniques

How to Calculate Net Present Value For example we are planning of starting a business of producing and selling ;We can estimate the initial cost with reasonable accuracy because we know…

## Independent and Mutually Exclusive Projects

Independent and Mutually Exclusive Projects Understanding of classification of capital budgeting projects plays a crucial role while analyzing viability of projects. What is mutually Independent Projects? A Project whose cash flows…

## Internal Rate Of Return And Mutually Exclusive Projects

Internal Rate Of Return And Mutually Exclusive Projects……. What's the Concern? While considering the mutually exclusive projects, IRR technique can be misleading. Investment projects are said to be mutually exclusive…

## Capital Structure and Cash Flows

Capital Structure and Cash Flows On one hand, operations of the company may help in forecasting of future cash flows but in addition to this, future cash inflows and outflows…

## Present Value of Multiple Cash Flows

Present Value of Multiple Cash Flows We come across many cases where we have to determine the present value of series of multiple cash flows. There are two ways we…

## Discounted Payback Period

Discounted Payback Period One of the limitations in using payback period is that it does not take into account the time value of money. Thus, future cash inflows are not…

## Internal Rate of Return

Internal Rate of Return Internal Rate of Return is another important technique used in Capital Budgeting Analysis to access the viability of an investment proposal. This is considered to be…

## Payback Period

Payback Period Payback period is the first formal and basic capital budgeting technique used to assess the viability of the project. It is defined as the time period required for the…

## How To Use Financial Calculator?

How To Use Financial Calculator? The financial calculator is considered as easiest and less time-consuming tool for computation of basic as well as advanced financial analysis techniques. A financial calculator is…

## Net Present Value

Net Present Value Net Present Value measures the difference between present value of future cash inflows generated by a project and cash outflows during a specific period of time. With…

## Capital Budgeting in Financial Management

What is Capital Budgeting? Capital budgeting is the process which enables the management to decide which, when and where to make long-term investments. Businesses always look for opportunities that increase shareholder…