List of Theory Topics = PAPER F9
CAPITAL INVESTMENT APPRAISAL
1) Why Companies spends money on Capital Investment?
2) Stages in Capital Investment Process
3) For Capital investment appraisals why cash flows are more appropriate than Accounting profits 4) Meaning of Relevant Cash flows and examples of Relevant Cash flows 5) Why Time Value of Money is Key Concept in investment Appraisal? 6) Assumptions of discounted cash flows
7) How inflation may complicate analysis of Decisions Difference between Specific inflation rate and General inflation rate 9) Advantages and disadvantages of
• Payback Period (PBP),
• Accounting Rate of Return (ARR),
• Net Present Value (NPV) and
• Internal Rate of Return (IRR).
10) Comparison between NPV & IRR
11) Difference between Risk and Uncertainty
12) Strength and weakness of Sensitivity analysis, Expected Value (EV) 13) Capital Rationing: Hard and soft Capital Rationing
14) Assumptions of Profitability index Approach
15) Assumptions in Asset Replacement Decisions
16) Terms: Mutually exclusive Projects, Non conventional caste flows, divisible projects, Single period Capital Rationing, Multi-period Capital Rationing.
WORKING CAPITAL MANAGEMENT
1) Objective of Working Capital Management.
2) Factors affecting length of Operating Cycle
3) Objective of Inventory Management
4) Costs of holding high inventory and low inventory
5) Assumption and limitation of Economic Order Quantity (EOQ) Model 6) Advantages and disadvantages of Just In Time (JIT)
7) Sources of Information of Assessing Credit Worthiness of Customer Three Services offered by Factoring Company 9) Benefit and Problems of Factoring
10) Ways of Managing Foreign Accounts Receivable
11) Treasury Management: Role, Advantages and disadvantages of centralized Treasury Function. 12) Assumption of Baumol Cash Management Model.
13) Reasons for holding cash and Reasons of cash flow problems. 14) Methods of Easing cash shortage.
15) How to use cash surplus...
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