Ref: BBI/FM/01/2015-16

  SY BBI 4.2 FINANCIAL MANAGEMENT II

.1             Unit I) Capital Investment Decisions (15 lectures)

.1.1            Proposal origination, Economic Evaluation, Capital Expenditure control, Post Audit

.1.2            B) Tools of evaluating Capital Investments Payback Period, Discounted Payback period , Net Present Value, Internal Rate of Return, Profitability Index, Equivalent Annual Cost, Modified Internal Rate of Return.

.2             Unit II: Cost of Capital (15 lectures)

.2.1            ‐ Computation of Weighted Average Cost of Capital

.2.2            ‐ Cost of Debts , preferences shares , and Net worth

.2.3            ‐ Minimum acceptable rate of return and its relationship with cost of capital

.3             Unit III Leverage and capital structure theories (15 lectures)

.3.1            ‐ Financial , Operating and Combined Leverage

.3.2            Capital Structure Theories

.3.3            ‐ Net Operating Income(NOI)

.3.4            ‐ Net Income Approach (NI)

.3.5            ‐ Modigilani- Miller (MM) Approach

.3.6            Capital Structure Policies

.3.7            ‐ Determinants of capital Structure Decisions

.3.8            ‐ Approach to estimating the target capital structure

.3.9            ‐ Variation in Capital Structure

.3.10        ‐ Earnings Before Interest and Taxes / Earnings per share ( EBIT/ EPS) , Analysis & Return on

.3.11        Investment / Return on Equity ( ROI/ ROE) Analysis

.4             Unit IV Working Capital Management (15 lectures)

.4.1            ‐ Gross and Net working capital, Positive and

.4.2            Negative Working capital.

.4.3            ‐ Estimation of Working Capital