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Accounting For Management
Capital budgeting techniques
Explain the difference between simple and compound interest.
Explain the concept of time value of money.
Compute the present value of a single sum and an annuity.
Analyze investment projects using major capital budgeting techniques like net present value, internal rate of return, payback period and accounting rate of return.
Explain the concept of after-tax cost, after-tax benefit and after-tax cash flow.
Explain how income tax impacts the computation of net present value of a project.
Explain the procedure of capital rationing.
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Approximate time required:
3 – 4 hours
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Simple and compound interest
Present value of a single payment in future
Present value of an annuity
Net present value method
Internal rate of return method
Accounting rate of return method
Impact of income tax on capital budgeting decisions
Capital rationing process
Present value of $1 table
Present value of an annuity of $1 in arrears table
Future value of $1 table
Future value of an annuity of $1 in arrears