Investment decision and cost of capital, Financial Management

Assignment Help:

INVESTMENT DECISION AND COST OF CAPITAL

In Finance, investment decision is disclose the allocation of funds in fixed assets or long term. This decision is also known as capital expenditure decision / capital budgeting decision.  These decisions associated to the profitability of the business. Financial management is associated to procurement of funds at cheaper cost and allocating them to projects at higher rate of return. The borrowing or procuring function is associated to the calculation of the cost of every kind of source of funds in addition to the overall cost of all sorts of funds borrowed or to be borrowed by a business.  The guiding standard in both these decisions is that - the overall cost of capital must be the lowest and the return on the various investments must be the highest at any specified period.  These two decisions will decide the financial health of an organization.


Related Discussions:- Investment decision and cost of capital

Define the type of bond instrument, You are an investment banker advising a...

You are an investment banker advising a Eurobank with reference to a new international bond offering it is considering.  The carries on are to be employed to fund Eurodollar loans

Explain the preferred stocks by equity claims, Explain the preferred stocks...

Explain the preferred stocks by equity claims. Preferred stocks are equity claims with limited ownership rights in comparison to common stocks. They differ from common stocks i

T - account of the banking system - equilibrium, Suppose that the Fed buys ...

Suppose that the Fed buys $1 million of bonds from the First National Bank. If the First National Bank and all other banks use the resulting increase in reserves to purchases bonds

Explain the bird in the hand theory of cash dividends, Explain the bird in ...

Explain the bird in the hand theory of cash dividends. The bird in the hand dividends theory state that dividends received now are better than a promise of future dividends.  U

Putable bonds, Putable bonds can be redeemed prior to maturity at the initi...

Putable bonds can be redeemed prior to maturity at the initiative of the bondholder. These bonds are more advantageous to the investors as they get an opportunity to re

What does it mean if this value were zero, What does it mean when we say th...

What does it mean when we say that the correlation coefficient for two variables is -1? What does it mean if this value were zero? What does it mean if it were +1? Correlation

Seed financing, It's a small amount of money which is used for initial mark...

It's a small amount of money which is used for initial market research or product development for a new venture.

Employee benefit plan, Employee Benefit Plan - Compensation arrangement, u...

Employee Benefit Plan - Compensation arrangement, usually in writing, used by employers in addition to wages or salary. Some plans like group term life insurance, medical insuranc

Describe about permanent working capital, Q. Describe about Permanent Worki...

Q. Describe about Permanent Working Capital? Permanent Working Capital: - The requirement for working capital fluctuates from time to time. Nevertheless to carry on day-to-day

Critically evaluate data & resources-critically analyse, Crown casino recen...

Crown casino recently announced its intention to build a new 500-room luxury hotel in Perth costing approximately $568 million. As part of the agreement, the WA government has agre

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd