Essay About 3Capital Budgeting Decisionscapital Budgeting Process And Principles Of Corporate Finance

Framework of Financial Decision Making in a Business Unit.
Paper MBAEX-8106: Managerial FinanceSemester I/2013-14Faculty Instructor: NarainContact details: Room No.: 44                North Campus,                Faculty of Management Studies,                University of Delhi, Delhi – 110 007.                Email: [email protected]        Course objective:The objective of the course is to acquaint the participants with the broad framework of financial decision making in a business unit.Pre-requisite for the course:General understanding of the economic and business terms mostly used in the business page of daily newspapers often read by the participants.Recommended readings:Brealey, Myers, Allen &Mohanty – “Principles of Corporate Finance” (henceforth BMAM)Damodaran – “Corporate Finance” (henceforth DAM)Gitman – “Principles of Managerial Finance” (henceforth LJG)Berk, DeMarzo& Harford – “Fundamentals of Corporate Finance”(henceforth BDH)Van Horne &Wachowicz– “Fundamentals of Financial Management”(henceforth VHW)Khan & Jain – “Basic Financial Management”(henceforth K&J)Detailed course content & readings:Introduction to Managerial FinanceIntroduction to financial management, functions of finance manager, objective of financial management, agency issueDAM –chapter 1 & 2BMAM – chapters 1Time value of moneyTime preference of money, causes of such preference, Timelines, Compounding of cash flows, discounting of cash flowsBDH –chapter 4DAM – chapter 3Capital budgeting decisionsCapital budgeting process, Assumptions & problems, computation of project cash flowsVHM –chapter 12K&J – chapter 3Capital budgeting evaluation techniquesDesirable evaluation technique, Non-DCF project evaluation, DCF project evaluation, VHW – chapter 13BMAM – chapters 5BDH – chapter 8 & 9“How CFOs Make Capital Budgeting and Capital Structure Decisions”, Journal of Applied Corporate FinanceCost of capital estimationAssumptions of hurdle rate, components of hurdle rate, computation of cost of each sources of financing, weights for each sources of financing, desirable hurdle rateVHW – chapter 15LJG – chapter 11K&J – chapter 4Capital structure decisionsCapital structure & hurdle rate, concept of leverage, EBIT-EPS analysis, theories of capital structure, factors affecting capital structure