Probir Banerjee has Published 454 Answers

What are the types of Finance Functions?

Probir Banerjee

Probir Banerjee

Updated on 13-Aug-2021 14:23:16

Finance functions are divided into two broad functions − Long-term decisions and Short-term decisions. Long-term decisions are applicable to a tenure of more than one year, while short-term decisions are meant for one year or less.Note − Finance functions or decisions are broadly divided into long-term and short-term decisions.Long-term DecisionsLong-term ... Read More

What are the functions of Treasurers and Controllers?

Probir Banerjee

Probir Banerjee

Updated on 13-Aug-2021 14:19:36

Treasurers and Controllers are designations essentially related to the US and the UK corporate. In those markets, the roles and responsibilities are clearly defined. Although some Indian companies also have them, the number of such companies is very limited.The duties in the US contextThe major responsibility of the treasurer usually ... Read More

What is Required Rate of Return (RRR)?

Probir Banerjee

Probir Banerjee

Updated on 13-Aug-2021 14:17:25

The Time Value for Money is usually expressed by an interest rate that remains positive even without any risk. This rate is therefore called risk free rate. An individual or a company may agree to receive a payment if the risk-free rate is applied to his investment.For example, suppose an ... Read More

Real Assets and Financial Assets - What are the differences?

Probir Banerjee

Probir Banerjee

Updated on 13-Aug-2021 14:15:45

There are two types of assets associated with a company - Real Assets and Financial Assets. Real assets are needed to continue operations and financial assets are non-physical assets that can be converted to cash easily. Real assets are called real because they often have a real form that can ... Read More

What is Profit Planning and how is it related to Finance Function?

Probir Banerjee

Probir Banerjee

Updated on 13-Aug-2021 14:13:02

Planning the future profits is a good decision because it keeps organizations away from overspending. Moreover, as earning profits is the ultimate aim of all companies, being able to foresee the profit is very valuable for a firm. However, it is easier said than done.Managers often have no control over ... Read More

What is Perpetuity and how to calculate its Present Value?

Probir Banerjee

Probir Banerjee

Updated on 13-Aug-2021 14:10:57

Perpetuity is an annuity that lasts forever. It consists of several cash flows in a series where the period between two payments is equal. Moreover, in the case of perpetuity, the amount paid after each period remains the same. The periodic cash flows occurring in perpetuity are of utmost importance ... Read More

What is meant by Compounding?

Probir Banerjee

Probir Banerjee

Updated on 12-Aug-2021 14:28:30

Compounding is a process of calculating interesting rates. Unlike simple interest rates where interest rates remain the same over a period, in the case of compound interest, the interest rate goes on increasing with passing time. In the case of compounding, therefore, the wealth grows at a faster rate than ... Read More

What are the differences between Debt and Equity Funds?

Probir Banerjee

Probir Banerjee

Updated on 12-Aug-2021 14:24:05

Mutual funds are of various nature depending on the needs and requirements of investors. However, the most common factor that separates them is their risk appetite. The riskier firms offer better returns on investment while the less risky ones provide fewer returns.There are predominantly two types of funds: Debt Funds ... Read More

Why is it important for Finance Managers to have an understanding of Capital Markets?

Probir Banerjee

Probir Banerjee

Updated on 12-Aug-2021 14:21:32

A Capital Market is a place where investors and borrowers deal with each other. So, a finance manager must be aware of the markets. The value of securities and how they're traded in the markets should also be in the knowledge of the manager.Capital markets are where the securities are ... Read More

What are Agency Problems?

Probir Banerjee

Probir Banerjee

Updated on 12-Aug-2021 14:20:15

The conflict between the managers and shareholders of a company is known as the Agency Problem. Agency problems may have a variety of reasons but the most common reason for such a problem to arise is due to the lack of interest in shareholder's wealth maximization.Shareholders usually invest in a ... Read More

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