Sign up now
to enroll in courses, follow best educators, interact with the community and track your progress.
Download
Quick Revision of Capital Budgeting Techniques (in Hindi)
337 plays

More

Heena Malhotra
Believe in Conceptual Learning.

U
Unacademy user
B
sir Ur became tired I think Ur voice is so full sir take care sir
awsm mam thank u so much
yes maam now today I completely understand with financial actg before ur lecture it was very difficult for me.......but now it is easy +understandable to me.....thankuuuuuu
Heena Malhotra
a year ago
Always welcome and always here to help :)
  1. Capital Budgeting Decisions By Heena Malhotra


  2. Payback Period Traditional or Non Discounting ccounting Rat of Return (ARR) Capital Budgeting Techniques Net Present Value (NPV) Profitability Index (PI) Time adjusted or Discounted Cash Flows Internal Rate of Return (IRR) Modified Internal Rate of Return (MIRR) Discounted Payback By Heena Malhotra


  3. The Reinvestment Assumption The Net Present Value technique assumes that all cash flows can be reinvested at the discount rate used for calculating the NPV. This is a logical assumption since the use of the NPV technique implies that all projects which provide a higher return than the discounting factor are accepted. In contrast, IRR technique assumes that all cash flows are reinvested at the projects IRR. This assumption means that projects with heavy cash flows in the early years will be favoured by the IRR method vis- -vis projects which have got heavy cash flows in the later years. This implicit reinvestment assumption means that Projects like A, with cash flows concentrated in the earlier years of life will be preferred by the method relative to Projects such as B. By Heena Malhotra


  4. Investment Decisions Types of Investment Decisions Capital Budgeting --Techniques . Pay-back period Basic Principles for measuring Project Cash flows Accounting Rate of Return (ARR) Net Present Value (NPV) Profitability Index (PI) .Internal Rate of Return (IRR) . Modified Internal Rate Capital budgeting in special cases of Return (MIRR) Discounted Pay-back period


  5. Capital Budgeting under Capital Rationing o There may be a situation due to resource (capital) constraints (rationing) a firm may have to select some projects among various projects. By Heena Malhotra