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Advanced capital budgeting

AFM

answered on 10-Mar-24 13:09

Why are we taking cost of capital as discounting rate ? What is cost of capital in this context?

latest answer

Cost of capital is the overall cost of capital (WACC). The cost of capital is often used as the discount rate in financial analysis because it represents the opportunity cost of using funds in a particular investment or project

Hanumanthu Rajesh

Hanumanthu Rajesh

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312

presentation doubt

AFM

answered on 08-Mar-24 04:40

concept r clear sir, i have doubt in presentation part , need to present every step in exam or presentation in classes which is enough for presentation in exam sir especially for variance (x-x bar)whole square ,

latest answer

Upto you. step wise is as much for you to cross check as it is for evaluator X-x bar computation may not carry step wise marks

Hariharan S

Hariharan S

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295

illustration -CE

AFM

answered on 07-Mar-24 21:31

alpha can also be directly multipled by cash flow ?

latest answer

yes. and then with PVF Why are you asking this ? one more student asked same query last week

Hariharan S

Hariharan S

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216

Bonds valuation

AFM

answered on 15-May-24 16:33

Sir which formula is correct in this question?

latest answer

No problem sir

Sruthi Bellamkonda

Sruthi Bellamkonda

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333

Net Asset Value

AFM

answered on 07-Mar-24 20:23

Whether Net Assets and Net Asset value same?

latest answer

We are trying to value equity shares - why will we include value of debt in it? In this question there is not debt at all so it does not matter but for any business valuation question whether they call it as net assets or nav, when it comes to equity valuation you exclude value of debt. Secondly in business valuation, you do not compute Net assets value with book values but consider fair / realizable / market value of all assets less market value of liabilities less contingent liabilities - in this question since market values are not known we consider book values

shamanth rm

shamanth rm

CA Final

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282

Normal distribution

AFM

answered on 07-Mar-24 09:09

Sir,can you explain how you are relating standard deviation and mean to normal distribution or to the chart? In my opinion, you have given less concept at this point.

latest answer

PLs finish the full chapter and then we can discuss

Hanumanthu Rajesh

Hanumanthu Rajesh

CA Final

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338

Normal distribution

AFM

answered on 07-Mar-24 09:14

We will not get the data of Stock market on Saturday & Sunday and holidays , ,then how could it be continuous data ? Please clarify it sir

latest answer

good question. Even if it is off for a day, or two, during the trading hours it is continuous . that is what matters. By your own logic stock markets cannot shut at 3.30 PM or open at 9.00 AM. continuous does mean it is always on. When market is on the values are not discrete but continuous when we look at tick level data

Hanumanthu Rajesh

Hanumanthu Rajesh

CA Final

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411

IRRM- Illustration 13

AFM

answered on 07-Mar-24 09:18

Sir, In this problem, I am not able to understand the premium part. Why we have divided the premium payable with the PVF and 4 periods as reset periods are only 3 right

latest answer

We did that because question says so.

Suresh Avinash

Suresh Avinash

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356

Premium deduction

AFM

answered on 07-Mar-24 09:27

Do we need to deduct 3 rs premium amount twice ? Or In case a - reducing rs 2 and case b reducing rs 1 Is this correct ?

latest answer

In scenario (a), he took two positions, both call and buy positions, paying a premium of ₹3 for each. He gained ₹1 from these positions, resulting in a net loss of ₹2. We consider each position as taken at two different scenarios for analysis.

Rahul Kumar

Rahul Kumar

CA Final

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2

432

EAC

AFM

answered on 07-Mar-24 20:25

Sir while calculating EAC what is the logic behind dividing the present value of cash outflows with PVAF?

latest answer

Pls call back... i tried reachin you

Prasoon Goel

Prasoon Goel

CA Final

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593