FINANCIAL MANAGEMENT

SYLLABUS
Investment Appraisal-15
Cost of Capital-10
Working capital-15
Business Finance-15
Business Valuations-15
Risk Management-10
Financial Management environment-10
Financial management Function-10
Investment Appraisal
Scope
Decision making
Relevant costs
Strategic(Has an impact on long term outlook of the
business)
Risky
Investment Appraisal Techniques
Payback
ROCE(ARR)
Time Value of Money
NPV
IRR
Discounted Cash flow techniques
PAYBACK
Length of time taken to pay back the initial
investment.
LEARN:Advantages and Disadvantages
PROFORMA

year cashflow Net

1 60 (40)
ILUSTRATION 1
Rough Ltd has the opportunity to invest in an investment
with the following initial costs and returns:
A
$000s
Initial investment (100)
Cash flows
Yr 1 50
Yr 2 40
Yr 3 30
Yr 4 25
Yr 5 20