Corporate Finance Content List
Internal rate of return is another widely used evaluation method for capital budgeting process which calculates the rate of return from the new project and compares it with the cost of capital to take the capital budgeting decision. Internal rate of return or IRR is the discount rate which makes the present value of project’s […]Continue Reading... No Comments.
Net present value (NPV) is the most widely used quantitative method in capital budgeting process. It denotes the sum of present values of all the expected future incremental cash inflows (deducting the cash outflows) if the project is undertaken by the management. The discount rate used to calculate the present value of the future cash […]Continue Reading... No Comments.
There are some quantitative methods used in corporate finance to calculate the financial benefit in money or rate of return term if a project is undertaken. These below methods are used by the management to take the capital budgeting decision. All these main methods are described below with example.Continue Reading... No Comments.
Now the “Cash Flow” and the interest rate related “Discount Factor” are the most important concept of capital budgeting process. Here in this section we will explain this in details. 1. All the capital budgeting decisions are taken based on the incremental cash flows, not based on the income from the project. To do this […]Continue Reading... No Comments.
Capital budgeting is the financial tool to identify and evaluate any financial projects which requires capital investment. This is same as the budget which deals with the cash inflow, cash outflow and the profit or loss at the end from any specific financial project undertaken. Capital budget also helps to identify the long term benefit […]Continue Reading... No Comments.
Corporate finance denotes the finance mechanism used by the corporates or the companies (public and private) to analysis any financial decision based on the expected outcome of the decision. Corporate finance also deals with the tools and process to calculate the expected outcome (profit or loss) from any kind of financial decisions. The primary aim […]Continue Reading... No Comments.