## 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:…

## Criticism on Capital Asset Pricing Model

Criticism on Capital Asset Pricing Model It is pertinent to mention here that the CAPM theory is about the real world; but it does not describe the real world fully.…

## Capital Asset Pricing Model (CAPM) Definition, Assumptions and Calculation

Capital Asset Pricing Model (CAPM) What is CAPM? CAPM Assumptions  CAPM Formula How to calculate CAPM? Capital Asset Pricing Model CAPM stands for Capital Asset Pricing Model. Capital Asset Pricing Model (CAPM) defines…

## Discounted Cash Flows

Discounted Cash Flows - Capital Budgeting Techniques We have discussed earlier that accounting rate of return & payback period ignores time value of money and cash flow trends. Means cash…

## Accounting Rate of Return (ARR) | Capital Budgeting Techniques

Accounting Rate of Return - Capital Budgeting Techniques Accounting rate of return is the project evaluation technique which differs from other capital budgeting techniques because the focus of this technique is…

## Difference between Annuity Due and Ordinary Annuity

Annuity Due and Ordinary Annuity - Capital Budgeting Techniques We often encounter situations where we have multiple cash flows of same amount. A very common example of such cash flows is…

## 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…