CAPITAL BUDGETING DECISION 1. Meaning Capital budgeting denotes situation where funds are invested immediately and returns are expected after a year. In growing orgnisation capital budgeting is more or less continuous process and it is carried out by top management. The role of any Finance Manager is to critically evaluate proposal, evaluation of alternative proposal and select best one. The following are the some of the cases where heavy capital investment may be necessary. A) Replacement
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Thesis for the Degree of Master of...? INCORPORATING LIQUIDITY RISK INTO VAR MODEL TO IMPROVE RISK MANAGEMENT AND APPLYING THE LIQUIDITY ADJUSTED VALUE AT RISK MODEL ON VIETNAMESE STOCK MARKET Student: Ten truong: Ten khoa hoc: September, 2012 INCORPORATING LIQUIDITY RISK INTO VAR MODEL TO IMPROVE RISK MANAGEMENT AND APPLYING THE LIQUIDITY ADJUSTED VALUE AT RISK MODEL ON VIETNAMESE STOCK MARKET by student Avised by Ten giao su Submitted to Ten khoa of Ten truong in the
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Pioneer Petroleum Corporation Ryan Rhodes Dr. Bacon February 18, 2009 Table of Contents Introduction Background……………………………………………………………….. Pg. 3 Major Problems……………………………………………………………. Pg. 5 Analysis Alternative Courses of Action………………………………………………Pg. 6 Analysis of Alternatives……………………………………………………. Pg. 6 Conclusion Suggested Course of Action………………………………………………... Pg. 8 Introduction Background Pioneer Petroleum was formed in 1924 with the merger of several
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maturities is considered desirable because this strategy minimizes interest rate risk. b. Default risk refers to the inability of the firm to pay off its maturing obligations. c. The matching of assets and liability maturities lowers default risk. d. An increase in the payables deferral period will lead to a reduction in the need to non-spontaneous funding. 2. Which of the following would increase risk? a. Increase the level of working capital. b. Change the composition of working
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including the determination of a fair rate of return on Comsat’s cost of capital. Comsat had suggested a 12% rate of return for the period of 1964 to 1974 and 15% thereafter. However, the FCC’s staff has presented evidence to contradict that of Comsat. (2) MAJOR PROBLEM(S): The major issue is calculating how the FCC can determine Comsat’s fair rate of return and cost of capital and what fair rate of return is appropriate for Comsat’s particular level of risk? (3) ALTERNATIVE COURSES OF ACTION:
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CAPITAL ASSET PRICES WITH AND WITHOUT NEGATIVE HOLDINGS Nobel Lecture, December 7, 1990 by W ILLIAM F. S H A R P E Stanford University Graduate School of Business, Stanford, California, USA INTRODUCTION* Following tradition, I deal here with the Capital Asset Pricing Model, a subject with which I have been associated for over 25 years, and which the Royal Swedish Academy of Sciences has cited in honoring me with the award of the Prize in Economic Sciences in Memory of Alfred Nobel. I first present
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handout from the government is put in a special bank savings account with 6% p.a. interest compounded yearly, it will grow to $32,071.35 in 20 years. Question 2 If the handout from government is put into the sharemarket for 20 years with average return of 12% p.a, the amount at the average person’s retirement age will be much larger than that in a bank saving account. The amount will be the future value of the current $10,000 with 12% p.a interest compounded yearly. n is the average years for the
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Problem Introduction ,There are several areas can be considered when understanding the risk of an investment. In this exercise, as a risk-averse investor, each of the expected rate of return and volatility of the stock for both of the economies is the same. However, for economy number one, all the stocks move together. For economy number two, the stock returns are independent of each other. Which is the best investment? Economy One In the first economy, all stock move
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Efficient market Is a market that prices will quicky respond when there is an announcement of any kind of new information. Textbook. Primary versus secondary market Risk-return tradeoff Agency (principal and agent problems) Market information and security prices and information asymmetry Agile and lean principles Return on investment Cash flow and a source of value Project management Outsourcing and offshoring Inventory turnover Just-in-time inventory (JIT) Vender managed
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useful tool for the estimation of the market returns, which in later use can help to valuate market prices for a specific UK company listed in LSE, estimating future prices and forecasting possible threats in the present value of investments. * BETA AND CAPM MODEL ANALYSIS * Beta The first thing that has to be done, in order to estimate the rate of return of an asset is to calculate the beta, which is a measure of the investment’s portfolio risk. The
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