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CAIIB ABFM By Ashish Sir Class 3
What is the primary objective of Advanced Business and Financial Management in the context of CAIIB?
ABFM aims to equip bankers with advanced skills in financial decision-making, risk management, and strategic business analysis to enhance managerial competence at senior levels.
What is 'Capital Rationing' and why do firms practice it?
Limiting capital expenditure when funds are scarce to maximize returns.
What does the concept of 'Economic Value Added' (EVA) measure in financial management?
EVA measures the value a company generates above its required return on capital; it is calculated as Net Operating Profit After Tax (NOPAT) minus the product of invested capital and the weighted average cost of capital (WACC).
What is 'Profitability Index' (PI) and how is it used in project selection?
PI = PV of cash inflows / Initial investment; projects with PI > 1 are accepted.
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