Capital Investment Decisions & Term Loans
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
Discounted Cash Flow (DCF) methods?
recognise the time value of money. The two flagship DCF tools are Net Present Value (NPV) and Internal Rate of Return (IRR).
Non-Discounted Cash Flow methods?
ignore the time value of money. The two well-known tools here are the Payback Period method and the Accounting Rate of Return (ARR) method.
What are 10%?
are placed before the firm.
0 — Project A — Cash Inflow (₹) / PV Factor @ 10% / Project A — PV (₹)?
Project A — Cash Inflow (₹): (25,000); PV Factor @ 10%: 1.000; Project A — PV (₹): (25,000)
1 — Project A — Cash Inflow (₹) / PV Factor @ 10% / Project A — PV (₹)?
Project A — Cash Inflow (₹): 4,500; PV Factor @ 10%: 0.909; Project A — PV (₹): 4,090.50
2 — Project A — Cash Inflow (₹) / PV Factor @ 10% / Project A — PV (₹)?
Project A — Cash Inflow (₹): 6,000; PV Factor @ 10%: 0.826; Project A — PV (₹): 4,956.00
3 — Project A — Cash Inflow (₹) / PV Factor @ 10% / Project A — PV (₹)?
Project A — Cash Inflow (₹): 7,500; PV Factor @ 10%: 0.751; Project A — PV (₹): 5,632.50
4 — Project A — Cash Inflow (₹) / PV Factor @ 10% / Project A — PV (₹)?
Project A — Cash Inflow (₹): 9,000; PV Factor @ 10%: 0.683; Project A — PV (₹): 6,147.00
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