UNIT-2 Strategic Investment Decisions and Cost of Capital

1. Introduction Capital budgeting, also known as investment appraisal, is a crucial process that ...

1. Principles of Capital Budgeting Capital budgeting decisions are guided by several core princi...

1. Payback Period (PB) 1.1. Definition The payback period is a method that determines the number ...

1. Introduction The Net Present Value (NPV) method is a discounted cash flow (DCF) technique used...

1. Introduction The Profitability Index (PI) is a discounted cash flow (DCF) technique that measu...

Internal Rate of Return (IRR) and Modified Internal Rate of Return (MIRR) Internal Rate of Retur...

1. Introduction Net Present Value (NPV) and Internal Rate of Return (IRR) are two widely used dis...

1. Introduction The Terminal Value (TV) method evaluates investments by explicitly considering th...

1. Introduction The cost of capital is a crucial concept in financial management, serving as a be...

1. Introduction The cost of capital, as a decision criterion, is an overall or combined cost, rep...

1. Introduction Companies raise debt through various channels, including financial institutions, ...

1. Introduction The cost of preference shares represents the return expected by investors who hol...

1. Introduction The cost of equity capital is the return that a company must provide to its equit...

1. Introduction Retained earnings, the portion of a company's profits not distributed as dividend...

1. Introduction The overall cost of capital (WACC) is a composite or average cost, derived by com...