Capital Budgeting

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Capital Budgeting is the most important and most difficult task of a finance manager. Capital budgeting includes investment decision. Finance manager co-ordinates with project managers, bankers, promoters and other stake holders to get data for his analysis. Capital budgeting procedure includes use of various methods including statistical techniques.

Time Value of Money
Unlike Accounting, Financial Management does not consider value of money to be constant. To make any investment decision Financial Management considers change in value of the money. If the present value cash flow received in future in less than what its value is today or on the day of making investment then such investment must be avoided. However if the present value of cash flow received in future is more than such investment can be considered. Time Value of money can be calculated using various techniques. 

Compounding Technique: Future value of money can be calculated using this technique. Future value can be calculated for single cash flow, multiple cash flows and equal cash flow. Equal cash flows are known as annuity.

Discounting Technique: Present value of future cash flow can be calculated using this technique. 

CS Executive MODULE II Financial and Strategic Management paper will be conducted in multiple Choice questions (MCQ) pattern with negative marking for wrong answers. So it becomes important for CS executive students to practice online test series Financial and Strategic Management chapter Ratio Analysis

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