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13 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Adam Smith |
Wealth also considers timing and risk. |
Wealth V Profit |
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Alternatives to profit maximization and why they will not be value enhancing? |
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What are the 2 groups of quantitative investment techniques and which consider the time value of money(including risk)? |
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Define Accounting rate of return and the decision rule for it. |
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What are the advantvantages and disadvantages of Accounting rate of return ? |
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What is Time value of money ? |
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It is a method of discounting. |
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How does opportunity cost of investment come into discounting and time value of money? |
Uncertain investments carry risk and this needs to be evaluated aginst other projects to see if going ahead is worthwhile. |
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What are the different ways of describing Discounting? |
Minum required rate of return , project cost of capital. |
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What are the 3 main components of the Rate of return ? |
Pure time preference, Inflation premium , Risk premium. |
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Composition of NPV for different projects. |
Inflation is only considered for nominal rates. |
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What is the NPV and the Decision rule for it ? |
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What is capital rationing ? How is used to rank investment decisions? |
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Profitability Index |
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How can one use weighting for capital fund allocation ? (Look at hint ) |
Combine each over respective Investments multiplying the PI |
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