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

Describe a.i.g''s business model and structure, A.I.G. is often called the ...

A.I.G. is often called the largest insurance entity in the world. A.I.G.'s total assets were $860 billion on 12/31/2008 (dwarfing any other insurance entity) with 116,000 employees

Define the general principles of the city code, Define the General princi...

Define the General principles of the city code General principles of the city code Information available to all shareholders and shoul

Calculate the optimum amount of funds to transfer, Q. Calculate the optimum...

Q. Calculate the optimum amount of funds to transfer? The Baumol model is derived from the EOQ model and is able to be applied in situations where there is a constant demand fo

Rand corporation, what is the rand corporation five project rank

what is the rand corporation five project rank

Monitoring and controlling budgets, Monitoring and Controlling Budgets: ...

Monitoring and Controlling Budgets: The preparation of budgets is only part of the budget cycle.  Once set, an organisation should actively monitor actual revenue and expenditu

What is the required rate of return on the project, The risk free rate is 1...

The risk free rate is 10 percent and the expected return on the market portfolio is 14 percent. A firm considers a project that is expected to have a beta of 1.3, whereas the beta

Conversion ratio, It is the number that tells how many common stock...

It is the number that tells how many common stocks (or preference stocks) will the bondholder receive at the time of conversion. It is usually constant over

Valuing debt securities, Valuing Debt Securities Securities which promi...

Valuing Debt Securities Securities which promise to pay its investors a stated rate of interest and return principal amount at the maturity date are known as debt securities.

What is the importance of investigation of incidents, Q. What is the import...

Q. What is the importance of investigation of incidents? 1. Incident investigation is the process of identifying the underlying causes of incidents and implementing steps to pr

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