Types of Capital Investment Decisions Organizations often are faced with the opportunity (or need) to invest in assets or projects that represent long-term commitments. New production systems‚ new plants‚ new equipment‚ and new product development are examples of assets and projects that fit this category. Usually‚ many alternatives are available. For example‚ an organization may be faced with the decision of whether or not to invest in a new plant‚ or whether to invest in a flexible manufacturing
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Chapter 1 INTRODUCTION 1.1 Introduction Insurance‚ in law and economics‚ is a form of risk management primarily used to hedge against the risk of a contingent loss. More importantly‚ insurance company portfolio managers work under a different‚ and possibly more restrictive‚ set of regulatory constraints than other institutional investors (Badrinath‚ Kale‚ Ryan‚ & Jr‚ 1996). Insurance is defined as the equitable transfer of the risk of a loss‚ from one entity to another‚ in exchange
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5 : Capital Budgeting Practices in Selected Indian Companies 5.1 Introduction 5.2 Data Analysis and Findings 5.3 Conclusion 129 Chapter 5 : Capital Budgeting Practices in Selected Indian Companies 5.1 Introduction: This chapter examines the trend in capital budgeting practices of twenty eight companies operating in different industry. The search for a reliable method of project appraisal dates back to decades. The issue not only continues to be a matter of concern
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Investment Appraisal – Qualitative Factors Investment appraisal provides a scientific decision-making technique for managers and can‚ if used appropriately‚ improve the quality of decisions. However‚ as financial data do not always show the full picture‚ firms should not base their decisions solely on investment appraisal results. Qualitative Factors • The aims of the organisation. A profit-making firm will focus on the results of a financial investment appraisal‚ with companies experiencing
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CASE 2: VALUING CAPITAL INVESTMENT PROJECTS CORPORATE FINANCE GROUP Y Growth Enterprises‚ Inc When valuing any project‚ the free cash flows must be determined in order to be able to successfully implement any method of capital budgeting. Growth Enterprises is currently considering four projects. Each has an equal required initial investment of $10‚000‚000 which is followed by a set of cash flows different for each project. Depreciation figures for each project were calculated on a straight-line
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From the table 4.6‚ two factors were derived for the extent of investment in the capital market. Factor 1 is extent of investment decision under which item EID_1‚ EID_2‚ EID_3‚ EID_4‚ EID_5 and EID_6 are grouped. Factor 2 is extent of investment behavior under which EIB_1‚ EIB_2 and EIB_3 are grouped. Two factors explain 48.7% of the variance and cronbach alpha value ranges from .639 to .801. Cronbach alpha value falls in the range of .503 to .740 that implies a high reliability of the scale. From
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Chapter IX - INVESTMENT PROPERTY 1. Introduction. Investment property is property (land or a building – or part of a building – or both) held to earn rentals or for capital appreciation or both‚ rather than for: 1. use in the production or supply of goods or services or for administrative purposes; or 2. sale in the ordinary course of business. These properties are distinguished from owner-occupied properties which generate cash flows that are directly
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Capital Markets and Investment Banking Process FIN 402 Capital Markets and Investment Banking Process To be aware of fiscal scale as well as assess welfare of any sort of company the Investment Banking is an important factor Germaine to the predicament of the fiscal welfare of a person or a company of any scale. For the efficient manufacturing and sizes there is not any ideal strategy which has been forecasted these days. To match the aim‚ vision and objectives described through the fiscal
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misapplication of capital investment appraisal techniques Drury‚ Colin‚ Tayles‚ Mike. Management Decision. London: 1997. Vol. 35‚ Iss. 2; pg. 86 Abstract (Summary) An examination of the surveys of capital budgeting practices that have been undertaken during the past 20 years in both the UK and US reveals a trend towards a continuing increase in the use of more sophisticated capital budgeting techniques. In a longitudinal survey of capital budgeting practices of large UK companies between 1975 and
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Capital Structure: The most important function of Financial Management is to make decisions about the capital structure of firm. Capital structure refers to the make up a firm’s capitalization. It represents the mix of different sources of long term funds in the total capitalization of the company like equity shares‚ preference shares‚ retained earnings‚ long-term loans etc. In other words it can be precisely told as financing plan of the company. Capital is required to finance investments in plant
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