• Understand the basic nature of capital budgeting, the importance of, and the difficulties associated with, capital budgeting decisions and the various types of such decisions
• Discuss the major components of relevant cash flows, effect of taxes, depreciation, working capital on cash flow patterns/estimates
• Calculate the relevant cash flows in single proposals, replacement situations and mutually exclusive projects
• Compute, interpret and evaluate the accounting rate of return (ARR) and the widely-used traditional capital budgeting technique—the pay back period
• Apply the sophisticated capital budgeting techniques—net present value (NPV) and internal rate of return (IRR)—to relevant cashflows to choose acceptable as well as preferred capital projects
• Compute and illustrate terminal value (TV) method and profitability index (PI) as capital budgeting evaluation techniques
• Summarise capital budget practices by corporates in India
