Discuss the three common methods used in capital investing financial decisions
Common three methods used in capital investing financial decisions are:
1. NPV Method: The net present value uses the discounting rate i.e. the cost of capital to discount the future expected cash flows to find the net present value of the project. If the NPV is positive the project must be accepted and if it is negative it must be rejected.
2. IRR : Internal rate of return is the hurdle rate i.e. the minimum rate of return that the project to go ahead with the investment decision. Ideally IRR must be higher than the expected rate of return from the project.
3. Profitability index: It analyzes the profitability of the project by dividing the discounted cash flows by the initial investment. If the PI is higher than 1 then the decision must be taken to accept the investment.
Discuss the three common methods used in capital investing financial decisions
Discuss the 4 main financial statements and how they are used by managers to make decisions.
The financial manager has three major tasks. These involve making decisions about capital budgeting, capital structure and working capital management. As I indicated earlier, "the acquiring funds" part or "the finding the lowest cost funds" part corresponds to capital structure decision. Should the firm borrow money from the bank, issue bonds or stocks to generate funds? This would be a capital structure decision. Finding profitable investments part of "finding those investment projects with the highest return adjusted for risk" part...
discuss the process of capital investment and the importance of capital investment decisions for Healthcare Management today. in your discussion use three key terms from healthcare.
Financial Options and Weighted Average Cost of Capital (WACC). Determine two to three methods of using stock and options to create a risk free hedge portfolio can be created. Support your answer with examples of these methods being used to create a risk-free hedge portfolio. Create a unique hypothetical weighted average cost of Capital WACC and rate return. Recommend whether or not the company should expand, and defend your position.
Discuss and apply four accounting techniques and methods to make managerial decisions.
Describe and discuss three methods used to manage utilization during the course of hospitalization be sure to describe and provide examples as a support
Companies have various methods to raise capital and have to make decisions on the best method to do so. These methods include common stock and preferred stock. Your company has been performing well and the stock prices have been increasing. The Board of Directors are looking to reduce the price of the stock. Determine the best method to meet this objective, supporting your decision with real life examples. How will your decision affect the statement of cash flows?
Companies have various methods to raise capital and have to make decisions on the best method to do so. These methods include common stock and preferred stock. Your company has been performing well and the stock prices have been increasing. The Board of Directors are looking to reduce the price of the stock. Determine the best method to meet this objective, supporting your decision with real life examples. How will your decision affect the statement of cash flows?
Companies have various methods to raise capital and have to make decisions on the best method to do so. These methods include common stock and preferred stock. Your company has been performing well and the stock prices have been increasing. The Board of Directors are looking to reduce the price of the stock. Determine the best method to meet this objective, supporting your decision with real life examples. How will your decision affect the statement of cash flows?
1. Discuss managerial decisions regarding the cost of capital. 2. What is the cost of capital (WACC) for the firm that you are researching? (Student responses can comment on relative risks and costs of capital)