FAQs tagged as

Capital Budgeting

  1. Why might two companies calculate capital employed differently?

  2. Why does zero-based budgeting require ongoing evaluation and management?

  3. How can a growing business avoid stagnation when using zero-based budgeting?

  4. How does zero-based budgeting help lower operating costs?

  5. How does monetary policy influence the Fisher effect?

  6. How do you determine the Critical Path in operations management?

  7. What's the difference between economic value added (EVA) and economic rent?

  8. How does market risk affect the cost of capital?

  9. What role do shareholders play in a capital budget?

  10. What is the relationship between the hurdle rate (MARR) and the Internal Rate of ...

  11. What is the difference between a drawdown in banking and a drawdown in trading?

  12. How can an investor determine the efficiency of a company's working capital management?

  13. What are the components associated with working capital management?

  14. What does a low working capital ratio show about a company's working capital management?

  15. How far above the hurdle rate makes for a good investment?

  16. What's the difference between the hurdle rate and the high water mark?

  17. What ratios are most commonly used to judge working capital management?

  18. How do you use internal rate of return to calculate a capital budget?

  19. How do you use discounted cash flow to calculate a capital budget?

  20. What is the difference between EBIT and cash flow from operating activities?

  21. What is the difference between present value and net present value?

  22. Which financial ratio best reflects capital structure?

  23. How much debt is too much when calculating capital budgeting?

  24. What is the difference between paid-up capital and share capital?

  25. What is the formula for calculating opportunity cost?

  26. What are some examples of different types of capital?

  27. How does a company's capitalization structure affect its profitability?

  28. How does opportunity cost impact how cost of debt is evaluated?

  29. Do companies measure their cost of debt with before- or after-tax returns?

  30. Which is more important when estimating cost of capital - debt or equity?

  31. What is the formula for calculating net present value (NPV)?

  32. What are the different ways that corporations can raise capital?

  33. What is the difference between cost of debt capital and cost of equity?

  34. How does a company choose between debt and equity in its capital structure?

  35. How do you use net present value to calculate a capital budget?

  36. What is the formula for calculating the capital asset pricing model (CAPM)?

  37. What is the difference between financial capital and economic capital?

  38. How do interest rates influence a corporation's capital structure?

  39. How do you find the level of EBIT where EPS doesn't change?

  40. What is the formula for calculating weighted average cost of capital (WACC) in Excel?

  41. How do analysts and investors interpret Economic Value Added?

  42. How do I use the CAPM (capital asset pricing model) to determine the cost of equity?

  43. How do I calculate the cost of equity using Excel?

  44. How do you calculate the proper weights of different costs of capital?

  45. Why is it that under some circumstances, capital expenditure cannot be tax-deducted ...

  46. Which types of industries have the largest capital expenditures?

  47. How do you calculate costs of capital when budgeting new projects?

  48. What is the difference between CAPEX and OPEX?

  49. How do you use the profitability index rule when scoping out a project?

  50. What is the difference between the cost of capital and required return?

  51. What is the difference between cost of equity and cost of capital?

  52. What does a high weighted average cost of capital (WACC) signify?

  53. What is the difference between the current ratio and the acid test ratio?

  54. What are the different ways a CEO could influence stock prices?

  55. How do capital expenditures affect (CAPEX) the valuation of a company?

  56. How do you calculate working capital?

  57. How do changes in working capital affect a company's cash flow?

  58. What are the disadvantages of using net present value as an investment criterion?

  59. What's the difference between net present value and internal rate of return? How ...

  60. How does the required rate of return affect the price of a stock, in terms of the ...

  61. What do people mean when they say debt is a relatively cheaper form of finance than ...

  62. Which is a better measure for capital budgeting, IRR or NPV?

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