corporate financial management. Discount rate Main article: Discounting The most widely used method of discounting is exponential discounting‚ which values future cash flows as "how much money would have to be invested currently‚ at a given rate of return‚ to yield the cash flow in future." Other methods of discounting‚ such as hyperbolic discounting‚ are studied in academia and said to reflect intuitive decision-making‚ but are not generally used in industry. The discount rate used is generally the
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JC Life of Pi: A Movie Review The movie “Life of Pi” is a story of survival. In order to survive‚ the protagonist‚ “Pi”‚ draws his inner strength from his spirituality and practicality. A scientist once said‚ [i]“A man‚ as a general rule‚ owes very little to what he is born with. A man is what he makes himself.” As Pi tried to survive in the ocean‚ he became a soldier in his own right. What Pi’s character portrayed is very similar to what a good soldier should be. On Military Professionalism
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regarded QUESTION 2 a) What is the time value of money? flows? b) What factors need to be taken into account when choosing an appropriate discount rate? c) What do you understand by the terms (i) “net present value” (NPV) and (ii) “internal rate of return” (IRR)? d) Compare and contrast the NPV and IRR. Why is it important to “discount” future cash CONTENTS PART ONE: QUESTION 1 1. INTRODUCTION . 2. RISK 2.1 2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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13 Engineering Economics 1.0 INTRODUCTION The broad field of economics may be divided into macro and micro economics. Macroeconomics involves problems associated with nations such as trade‚ trade deficits‚ monetary policy‚ national productivity‚ growth of the economy‚ inflation‚ budget deficits‚ national debt‚ unemployment‚ tariffs‚ etc. Microeconomics involves problems of firms and of individuals. Engineering economics is a special branch of microeconomics largely involved with the analysis
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three main ideas. Economic Profit Is a Performance Metric To understand economic profit‚ it helps to distinguish between a performance metric and a wealth metric. A performance metric refers to a measure under company control‚ such as earnings or return on capital. A wealth metric‚ on the other hand‚ is a measure of value that - such as equity market capitalization or the price-to-earnings (P/E) multiple -depends on the stock market’s collective and forward-looking view. Now‚ although these two types
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1980‚ Quarterly dividend and earnings announcements and stockholders ’ returns: An empirical analysis‚ Journal of Finance 35‚ 1-12. Ariel‚ Robert A.‚ 1987‚ A monthly effect in stock returns‚ Journal of Financial Economics 18‚ 161-174. ‚ 1990‚ High stock returns before holidays: Existence and evidence on possible causes‚ Journal of Finance 45‚ 1611-1626. Asquith‚ Paul‚ 1983‚ Merger bids‚ uncertainty and stock holder returns‚ Journal of Financial Economics 11‚ 51-83. and David W. Mullins‚ 1983‚ The
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Analysis of company’s strength and weakness 15 Strengths:- 16 Weaknesses:- 16 recommendations for company 17 Realized rate of return: 18 Beta of the D.G. Khan Cement 18 Expected Return of the D.G. Khan Cement 19 Standard Deviation 20 Required rate of return (CAPM) 20 Expected Return Vs. Required Return 21 Portfolio Planning 21 Dividend growth model 24 Corporate Valuation Model 24 Constant & non-constant growth of dividend 27
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Treasury bills are paying a 4% rate of return. A risk-averse investor with a risk aversion of A = 3 should invest entirely in a risky portfolio with a standard deviation of 24% only if the risky portfolio’s expected return is at at least ______. Answer: 3 = (E[rQ] - .04)/(.242) => E[rQ] = (.242) x 3 + .04 = 21.28% 3. You invest $10‚000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 15% and a standard deviation of 21%
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Theorem Summary and Conclusions Selected References PART TWO: THE INVESTMENT DECISION 2. 2.1 2.2 2.3 2.4 2.5 Capital Budgeting Under Conditions of Certainty The Role of Capital Budgeting Liquidity‚ Profitability and Present Value The Internal Rate of Return (IRR) The Inadequacies of IRR and the Case for NPV Summary and Conclusions 8 8 8 10 11 13 15 18 21 24 25 27 27 28 28 34 36 37 what‘s missing in this equation? Please click the advert You could be one of our future talents maeRsK inteRnationaL
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