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BFM: Financial Management - Paper I
1.
1 Introduction to Financial Management
: (a) Introduction (b) Meaning (c) Importance (d) Scope and Objectives (e) Profit
vs Value Maximization (f) The Time Value of Money (g) Present Value (h)
Internal Rate of Return (i) Bonds Returns (j) The Returns from Stocks (k)
Annuity (l) Techniques of Discounting (m)Techniques of Compounding
2.
2 Investment Decisions : (a)
Introduction (b) Purpose of Capital Budgeting (c) Capital Budgeting Process (d)
Types of Capital Investment Decisions (e) Project Cash Flows and Net Profit Approval
(f) Basic Principle of Measuring Project Cash Flows: Increment Principle,
LongTermFundsPrinciple,ExclusionofFinancialCostPrinciple,PostTaxPrinciple,
Probability Technique for Measurement of Cash Flow (g) Capital Budgeting Techniques
(Only Time Adjusted / Discounted Cash Flows) Net Present Value, PI, IRR, Discounted
Pay Back (h) Capital Rationing
(Note:ProblemsonComputationofCashInflow,RankingofProjectsonVariousTechniques,SelectionandAnalysiswith/withoutCapitalRationing.(ExcludingComparisonofIRRwithRequiredRateofReturni.e.CutoffRate,IRRandMutuallyExclusiveProjectswithUnequalLives,MultipleIRR)
3.
3 Types of Financing (a)
Introduction (b) Needs of Finance and Sources : Long Term, Medium Term, Short Term (c) Long Term Sources of Finance (d) Short Term
Sources of Finance
4.
4 Cost of Capital (a) Introduction (b)
Definition and Importance of Cost of Capital (c) Measurement of Cost of Capital
(d) WACC
