Functions of Financial System.

Types of capital budgeting.

Functions of Financial System. For the economic transformation of a country, the financial system is the key to the institutional and functional vehicle. Finance assists in reducing the gap between the present and the future, and covers every aspect like channelization and effective usage of savings and making an efficient investment. It formulates the base, … Read more

Importance of Financial System

Types of capital budgeting.

Importance of Financial System. For the economic transformation of a country, the financial system is the key to the institutional and functional vehicle. Finance assists in reducing the gap between the present and the future, and covers every aspect like channelization and effective usage of savings and making an efficient investment. It formulates the base, … Read more

Types of Capital Budgeting

Types of capital budgeting.

Types of Capital Budgeting. Capital Budgeting Capital budgeting is the process of deciding how to invest in long-term assets (like land, buildings, machinery, furniture, etc.) that won’t be sold but will bring in money for the business. It involves long-term planning and monitoring of capital expenditure, as well as examining each proposal in a very … Read more

Components of Capital Budgeting

Types of capital budgeting.

components of capital budgeting. The exercise of “capital budgeting” analysis involves the following essential components: 1) Cash Outflows: The initial investment in a project, as well as subsequent investments at various stages, must be carefully estimated. Besides the cost of the core assets required for the project, other miscellaneous expenses involved in the project implementation, … Read more

Importance of Capital Budgeting

inventory management technique

The importance of capital budgeting. Capital budgeting for making an investment decision is the most effective and powerful tool. The importance of capital budgeting may be gauged from the following points: 1) Long-Term Effects: Decisions taken through capital budgeting are generally irreversible; they can be reversed, if at all possible, with a lot of difficulties. … Read more

Unsystematic Risk- Types of Risk

TYPES OF Risk

Unsystematic Risk. also known as “diversifiable risk,” as it can be managed and controlled, unlike “systematic risk.” which is difficult to manage and control as it is widespread and covers the entire system. The unsystematic risk may be specific to an industry or company and is caused by one or more of the following: 1) … Read more

Types of Risk – Systematic Risk

TYPES OF Risk

Systematic Risk. There are a number of risks a business organization is exposed to, like ‘Market Risk’, ‘Interest Rate Risk’, ‘Country Risk’, ‘Business Risk’, ‘Financial Risk’, etc. They can be put under two broad categories: Systematic Risk The risk, which is inherent to the entire market or system, is termed a ‘Systematic Risk’ or ‘Uncontrollable … Read more

Types/Classification of Cost

Types and classifications of cost. The cost may be classified as follows: 1) Future cost versus historical cost: Future costs are the basis on which financial decisions are taken. although they are only projections of what may or may not happen in the future, they are more important as compared to the historical cost, which … Read more

Modigliani and Miller (MM) Model

Types of capital budgeting.

Modigliani and Miller (MM) Model. The genesis of the Dividend Irrelevance Theory of Modigliani and Miller may be traced back to the “Capital Irrelevance Model’ advocated by them in a paper published in 1958. Under the above model, a was held that the capital structure of a company has no relevance as far as its … Read more