technological problem. With internet traffic increasing‚ internet service providers (ISPs) will have to increase their investments in bandwidth to contend with demand. However‚ the issue is that their required investments will exceed their revenue. A proposed
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CHAPTER 11: THE COST OF CAPITAL LEARNING GOALS: 1. Understand the key assumptions‚ the basic concept and the specific sources of capital associated with the cost of capital. 2. Determine the cost of long-term debt and the cost of preferred stock. 3. Calculate the cost of common stock equity and convert it into the cost of retained earnings and the cost of new issues of common stock. 4. Calculate the weighted average cost of capital (WACC) and discuss alternative weighing schemes
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Management of working capital has profitability and liquidity implications. That is why; working capital proposes a familiar front for profitability and short-term liquidity management. To reach optimal working capital management firm manager should control the trade off between profitability and short-term liquidity accurately. An optimal working capital management is expected to contribute positively to the creation of firm value. The crucial part in managing working capital is required maintaining
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EXAMINATIONS NOVEMBER 2012 Unit Code and Name: AFIN252‚ Applied Financial Analysis and Management Time Allowed: 3 hours plus 10 minutes reading time. Total Number of Questions: 50 Multiple Choice Questions plus 8 full response questions. Instructions: 1. PART A (30 marks): There are 50 multiple choice questions. Answers to these must be recorded on a red-coloured General Purpose Answer Sheet which will be marked by a computer. Please make sure your name is on this sheet. 2. PART B (60 marks): There
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MANAGING WORKING CAPITAL Cash Budgets and Current Assets Learning Objectives Upon reading this chapter‚ students should: • Be able to compare and contrast working and fixed capital • Understand the impact of the operating cycle on the size of investment in accounts receivable and inventories • Know the differences between the three motives • Be able to differentiate between float‚ collection float‚ and disbursement float • Know how
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Foreign direct investment (FDI) is a direct investment into production or business in a country by an individual or company of another country‚ either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds. Definitions Broadly‚ foreign direct investment includes "mergers and acquisitions
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I. Six major investment banks: The principal purpose of an investment bank (and of investment banking in general) is the underwriting of new securities issued by an investment bank’s clients. An investment bank may also provide other services‚ such as professional advice‚ working with mergers & acquisitions‚ and private wealth management. Traditional "investment banking" refers to financial advisory work. For example‚ a big corporation might ask for the bank’s help if it wants to borrow money
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projects by simply inspecting the cash flows. However‚ it is not a good method to rank the projects. In order to ensure that the investment projects selected have the best chance of increasing the value of the firm‚ we need tools to evaluate the merits of individual projects and to rank competing investments. In this case‚ our group using some tools which are Payback Period‚ Net Present Value (NPV) ‚ Profitability Index (PI)‚ and Internal Rate of Return (IRR). We are only using quantitative considerations
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REVIEW OF INVESTMENT APPRAISAL METHODS What is meant by investment appraisal practices? The investment appraisal process includes the generation of ideas‚ assessment and authorization‚ implementation and control of the project (Dennis R. Young‚ 2007). Decision-making is increasingly more complex today because of uncertainty. Additionally‚ most capital projects involve numerous variables and possible outcomes. For instance‚ estimating cash flows associated with a project involves working capital requirements
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EconomiA 14 (2013) 185–198 The influence of interest on net equity and interest rates on tax neutrality – a case study of the Brazilian corporate taxation Aloísio Flavio Ferreira de Almeida a ‚ Nelson Leitão Paes b‚∗ b a Funda¸ cão Getúlio Vargas‚ EAESP‚ Brazil Programa de Pós-Gradua¸cão em Economia (PIMES/UFPE) e CNPq‚ Brazil Abstract In this paper we visit the capital income taxation in Brazil to know whether and to what extent interest on net equity (INE) has an influence on tax neutrality‚ i.e
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