Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. Describes the Certainty Equivalent Coefficient Method?
Introduction: - Certainty equivalent coefficient process which makes adjustment against risk in the estimates of future cash inflows for a hazardous capital investment project.
In this process adjustment against risk is made in the estimates of future cash inflows of a risky capital project by adjusting to a conformist level of the estimated cash flows of a capital investment proposal by applying a correlation factor termed as certainty equivalent coefficient.
Formula for Computing Certainty Equivalent Coefficient: - The certainty equal coefficient is the ratio of riskless cash flow to risky cash flow. The certainty equal coefficient can be calculated with the help of the following formula:
Certainty Equivalent Coefficient = Riskless Cash Flow / Risky Cash Flow
(1) Riskless Cash Flow: - Riskless cash flow signifies the cash flow which the management expects when there is no risk in investment proposal.
(2) Risky Cash Flow: - Risky cash flow signifies the cash flow which the management expects when there is risk in investment proposal.
Fund Raising and Investment: Fund commitment requirement in Hedge Funds sometimes exceeds millions of dollars. In addition, high minimum investments are sometimes closed to new
Types of T-Bills In the US markets, though there are many types of T-bills, they can be broadly classified into two types - regular-series bills and irregular-series bills.
1. If Robinson wishes to maximize its total market value, would you recommend that it issue debt or equity to finance the land purchase? Explain. 2. Construct Robinson’s market va
When an investor purchases non-callable or non-putable convertible bonds, he would be buying a non-callable/non-putable straight security and also buying a call o
1 In the process of considering two job offers, Jill Saunders wants to determine which position would have the higher monetary value. Job 1 has a salary of $42,500 with $4,800 of n
You have $21 to spend on prawns and potatoes. Prawns cost $20 per kilo and potatoes cost $2 per kilo. (a) Supposing you can buy as much or as little as you want of prawns and
Determine about the Zero Interest Bonds (ZIBs) Very much alike DDBs, only crucial difference is that these are issued at face values (DDBs are issued at a discount to face valu
Q. What do you mean by Present Value of a Future Sum? The present value of a future sum will be worth less than the future sum because one foregoes the opportunity to invest an
What is the intuition of discounting the several cash flows in the APV model at fixed discount rates? The APV model is a value-additivity method where total value is defined by t
identify and explain the key stages in the capital investment decision-making process and the role of investment appraisal in this processs..
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd