KTU B.TECH SECOND YEAR BUSINESS ECONOMICS [HS200] NOTE - MODULE 5 | IMPORTANT QUESTIONS


BUSINESS ECONOMICS [HS200] NOTE - MODULE 5

KTU B.TECH SECOND YEAR BUSINESS ECONOMICS [HS200] NOTE - MODULE 5  | IMPORTANT QUESTIONS,Business Economics Notes,Business Economics Questions,Business Economics important questions,Business Economics model questions,Business Economics second year notes,Business Economics second year questions,HS200 questions,HS200 notes

1.What is Investment Analysis

Ans. A budgeting procedure that companies and government agencies use to assess the potential profitability of a long-term investment. 

Capital investment analysis assesses long-term investments, which might include fixed assets like equipment, machinery or real estate. 

The goal of this process is to pinpoint the option that is most likely to be the most profitable for the business. Businesses may use techniques such as discounted cash flow analysis, risk-return analysis, risk-neutral valuation and utility theory in a capital investment analysis.

2.What is capital budgeting ?

Ans.Capital budgeting is the process in which a business determines and evaluates potential expenses or investments that are large in nature. 

These expenditures and investments include projects such as building a new plant or investing in a long-
term venture. 

Often times, a prospective project's lifetime cash inflows and outflows are assessed in order to determine whether the potential returns generated meet a sufficient target benchmark, also known as "investment appraisal."

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