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The following are those decision details Liquidity decision: The liquidity decision is concerned with the management of the current assets, which is a pre-requisite to long-term success of any business firm. This is also called as working capital decision. The main objective of the current assets management is the trade-off between profitability and liquidity, […]
Risks in Capital Budgeting are from five different sources. They are: Project-specific risk Project-specific risk could be traced to something quite specific to the project. Managerial deficiencies or error in estimation of cash flows or discount rate may lead to a situation of actual cash flows realised being less than the projected cash flow. […]
The Baumol model helps in determining the minimum amount of cash that a manager can obtain by converting securities into cash. Baumol model is an approach to establish a firm’s optimum cash balance under certainty. As such, firms attempt to minimise the sum of the cost of holding cash and the cost of converting marketable […]
Road and dam construction projects may not generate high returns, but have a social impact. In CBA, the total cost and expected returns of a project are estimated in monetary terms. The CBA approach involves the estimation of cost incurred on raw materials, labour, rents and acquiring land. It does not consider the environmental aspect […]
Cost of quality indicates the sum of conformance cost and non-conformance cost. Conformance means delivering products that meet the quality requirement of the customer; whereas, non-conformance indicate the products that are rejected for not complying with the quality norms of the customer. Types of costs of quality associated with a project There are various […]
BOOT Projects model is beneficial for certain projects, there are many risks and problems associated with it and may act as a constraint in the implementation of these projects. The main problems associated with BOOT projects are as follows: There may be many reasons for this. One of those reasons may be unavailability of experienced […]
PPP stands for Public Private Partnership. The following are different types of PPP: Management contracts It is a type of PPP in which the public sector enters into an agreement with the private sector for managing a whole or a part of a public enterprise. In such a contract, the ownership is retained by […]
The following are Bases of international tax system: Tax neutrality To keep the economic efficiency from being affected the international tax system should remain neutral. For the nationality of the invester or the locality of the investment not to be influenced, a neutral tax is important. Such an environment will allow capital to move […]
The following are different international trade theories Mercantilism Mercantilism theory of international trade has its origin in England in the middle of 16th century. Mercantilism theory is based on the principle assertion that government control of foreign trade is of paramount importance for ensuring the prosperity and military security of the state. The main […]
The following are the list of project costs items: Direct and Indirect Costs Variable and fixed costs Actual and standard costs Direct and indirect costs Direct costs are expenses that directly affect the budget of a project. Expenses that are for the express benefit of the project, and would not be incurred if […]