1. Discuss the difference between – State also advantages & disadvantages each: a. The payback period & the discounted payback period criteria of capital budgeting. The payback period measures the time that it takes to recoup the cost of the investment. If the cash flows are an annuity, then we can simply divide the cost by the annual cash flow to determine the payback period Otherwise, as in the example, we subtract the cash flows from the cost until the remainder is zero
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expenses at a given time. It is the amount allocated to certain asset or expense as an exchange for that asset or to the usage that led to that expense. According to an article from entrepreneurship.org, the business planning starts with budgets. Budgeting is not an afterthought. Your budget is a reflection of the goals and strategies you have for each area of business. A one-year budget planning document for the firm that is composed of all other budgets is called a master budget. Usually it is composed
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Case Write-Up: The Investment Detective Case Summary The purpose of this case is to become a capital budgeting analyst and evaluate which set of free cash flows for 8 projects will result in the most effective investment for a firm’s capital. The objective given is to rank the four best that the company should accept. The case is broken down into three separate steps including the given information about estimated cash flows (inflows & outflows), determining the appropriate discount rate
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Q1A. WHAT IS PLANNING AND BUDGETING IN SOCIAL DEVELOPMENT PROGRAMME AND WHAT ARE THEIR IMPORTANCE PLANNING AND BUDGETING IN SOCIAL DEVELOPMENT PROGRAMME INTRODUCTION Like budgeting, planning is crucial to, individuals and organizations. The popular saying is “he who fails to plan, plans to fail”. Without good planning, development which is assumed to be the ultimate goal of all social programmes becomes a mirage. The primary reason for planning is to take care of the future. Thus, planning is
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An organization’s valuation can create very efficient planning and capital distribution making this an important step in the organization’s valuation. The short and long term investments of an organization affect the day to day decisions of management and it also affects the organization’s value. Because this affects the value of the organization it becomes extremely important to use appropriate and precise valuation methods in order to estimate business activities and or projects that can affect
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Vanderhein thought that he needed special expertise for the finance function forced by the rapid growth of the company and he recognized that the estimate of the cost of capital itself was questionable. The controller who is in charge of the financial part has been using book value weights to calculate WACC but it considers only long-term capital value. At this point, the problem is that they want to decide what weights should be used and know how much difference of WACC calculated by the choice of weights
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Because of improvements in forecasting techniques, estimating the cash flows associated with a project has become the easiest step in the capital budgeting process. a. True b. False (12-1) Cash flow estimation 2 F I K Answer: a EASY . Estimating project cash flows is generally the most important, but also the most difficult, step in the capital budgeting process. Methodology, such as the use of NPV versus IRR, is important, but less so than obtaining a reasonably accurate estimate of
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Concept Reflection Andrea Gomez HCS/405 February 24, 2016 Rosetta Stringfellow Concept Reflection The first step to budgeting for unforeseen changes and improvements in information technology that require large capital outlays is to appropriately plan for such an event. Healthcare facilities need to transition from the mentality that IT upgrades are merely something that need to be squeezed into the budget somehow, and actually create a meaningful plan that will transition IT from an “as
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20,000 | | |8,50,000 |11,75,000 | |Liabilities and Capital | | | |Share Capital |5,00,000 |7,00,000 | |Profit and Loss A/c |1,00,000
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Department; Community Health Lecturer; J Kwaku Agyemang 1. Course Description Managerial Economics is concerned with resources allocation, decisions that are made by managers in both private and public sections (private business, private NGO’s and public sector) of the economy. The course emphasizes the application of economic principles and methodologies to decision-making process of business firms operating under conditions of risk and uncertainty. Managerial Economics, thus, uses concepts, models
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