## capital investment Management

Investment Management Approaches! Investments need to be managed accordingly in order to make things clear as well as professionally sound. The better is the management of your investment the best…

## Portfolio Risk and Reward Measurement

Portfolio Risk and Reward Investment is always associated with two most important things namely, risks and returns and measuring both of these is always a crucial part of every investment.…

## 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…

## Components of Cost of Capital

Components of Cost of Capital Cost of Capital Definition The cost of capital is the minimum return rate required by the business to be earned in order to meet the…

## Time Value of Money

What is Time Value of Money? Time Value of Money – A Crucial Concept Time value of money is the name which we all hear every now and then in…

## IRR Decision Rule | Capital Budgeting Techniques

IRR Decision Rule IRR is one among a number of capital budgeting techniques which is most commonly used by the investors for evaluating their investment decisions. What is IRR? IRR…

## Business Credit Risk and Credit Rating

Credit Risk and Credit Rating Credit Risk In today's challenging business environment, it is very crucial for financial institutions to do risk assessment. Therefore, it is very important to know exactly…

## Capital Structure and Types Of Leverage

Capital Structure What Is Capital Structure? When you are asking about what the capital structure is and what it relates to what you will find is that it is regarding…

## Why people invest in stocks?|Capital Budgeting Techniques

Why people invest in stocks? Investors buy, hold and sell financial assets to earn returns on them. Within the spectrum of financial assets, why do some people buy common stocks…

## 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…

## 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…

## 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…

## Profitability Index

Profitability Index Profitability index (PI) is the ratio of investment to pay off a suggested project. It is a useful capital budgeting technique for grading projects because it measures the…