Discounted valuation techniques

Discounted valuation techniques

Bachelor of Business Studies (BBS) — Second Year

Subject: Fundamentals of Financial Management (MGT 215)

Unit 8: Basics of Capital Budgeting

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

• Explain the scope and key elements of discounted valuation techniques.
• Apply the relevant financial model, calculation or analytical approach and explain its assumptions and decision implications.

Curriculum Scope

• Net present value
• Profitability index
• Merits and limitations

Detailed Microsyllabus

1. Net present value

   1. Discount relevant inflows and outflows.
   2. Calculate net value at the required return.
   3. Interpret acceptance and comparison rules.

2. Profitability index

   1. Ratio of discounted benefits to the specified investment base.
   2. Compute using the exercise's convention.
   3. Discuss merits and limitations in project ranking.

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Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 41-43.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit or component allocations apply at their stated level; no separate topic hours or marks are assigned here.