Overview

Hi This course provides a detailed knowledge about Time Value of Money - Basic concept about Finance ands Capital Budgeting. The course consists of video lectures that explains concept along with illustrations. The illustrations are simple ones that makes it easy to understand the concept.The course is divided into following section:Section 1: IntroductionThis section explains basic concept of Time value of Money - Meaning along with examples.Section 2: More about Time value of MoneyThis section explains Uses of concept of Time Value of Money. The factors such as inflation and purchasing power place important role in measuring time value of money. This is explained in detail.Section 3: Interest, Present Value and Future Value This section explains Difference between Simple Interest and Compound Interest. How to calculate simple interest and compound interest and power of compounding.Other concepts related to Time Value of Money - Meaning of Present Value and Future ValueSection 4: Present Value and Future Value for single cash flowThis section explains How to calculate Present Value and Future Value for single cash flow ?How to derive formula for calculating present value and future value of single cash flow ?The explanation is followed by detailed illustrations.Section 5: Present Value and Future Value for AnnuityThis section explains How to calculate Present Value and Future Value for annuity.How to derive formula for calculating present value and future value of Annuity ?The explanation is followed by detailed illustrations.Section 6: Discount Factor and Annuity FactorThis section explains meaning of discount factor and Annuity factor and how to calculate the same.Section 7: Compounding Daily, Weekly, Monthly, Quarterly and Half Yearly.This section explains Calculation of present value and future value of single cash flow when rate of interest is compounded daily, weekly , Quarterly and half yearly.Calculation of present value and future value of Annuity- Ordinary Annuity and Annuity due when rate of interest is compounded daily, weekly , Quarterly and half yearly.Section 8: Internal Rate of Return (IRR)This section explains Meaning of IRR (Internal rate of return) and calculation of IRR using Interpolation method.Section 9: Capital Budgeting BasicsThis section explains meaning of Capital Budgeting along with it's purpose and process.Section 10: Types of Capital Budgeting DecisionsThis section explains about following types of capital budgeting decisions along with examples:Replacement and Modernization decisionExpansion decisionDiversification decisionMutually exclusive decisionAccept or Reject decisionContingent decisionSection 11: Treatment of various costs for purpose of calculating CashflowsThis section includes following topics:Difference in accounting profit and cashflowMeaning of incremental cashflow along with calculationCalculation of Tax Benefit on DepreciationOpportunity Cost - Meaning , Example and impact on cashflowsSunk Cost - Meaning , Example and impact on cashflowsWorking Capital costs - Meaning , Example and impact on cashflowsAllocated Overhead costs - Meaning , Example and impact on cashflowsSection 12: Types of CashflowsThis section explains types of cashflows for new projects and replacement projects.Section 13: Principles for calculating cashflowsThis section includes following topics:Block of Assets and Depreciation PrincipleExclusion of Financing Cost PrinciplePost Tax PrincipleDifference in treatment of depreciation and interest while calculating cashflows from profit and loss Section 14 ,Section 15, Section 16, Section 17, Section 18, Section 19, Section 20, Section 22 and Section 23: Capital Budgeting TechniquesThese sections include meaning , examples , advantages and limitations of following capital budgeting techniques:Payback Period MethodAccounting Rate of Return (ARR) MethodDiscounted Payback Period MethodProfitability Index (PI) MethodNet Present Value (NPV) MethodInternal Rate of Return (IRR) MethodModified Internal Rate of Return (MIRR)Section 21: IRR and NPVThis section explains anomalies in result for mutually exclusive projects as per Internal Rate of Return (IRR) Method and Net Present Value (NPV) Method under different situationsSection 24: Special CasesThis section includes following topics:Capital Rationing for divisible and indivisible projectsMethods to analyze Mutually Exclusive Projects with different periodsReplacement Chain MethodEquivalent Annualized Criterion MethodAll the sections are logically arranged so that it is easy to understand concept of Time Value of Money. The sections should be viewed chronologically. TIP: If the student simultaneously solves illustrations along with video lecture it will be easy to understand concept.Thank youHappy Learning!

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