Probir Banerjee has Published 469 Answers

How are Financial Goals related to a firm's mission and objective?

Probir Banerjee

Probir Banerjee

Updated on 13-Aug-2021 14:31:48

A company's objectives and mission affect all departments of a company, such as marketing, technology, and HR. Objectives and missions broadly state the aim of an organization and financial goals. Since the major aim of a company is to produce quality goods it is imperative that the finances provide the ... Read More

How would you differentiate Opportunity Cost of Capital from Required Rate of Return (RRR)?

Probir Banerjee

Probir Banerjee

Updated on 13-Aug-2021 14:30:07

In the calculation of Required Rate of Return (RRR), if the risks are comparable, then it is called the opportunity cost of capital. The equation for calculation of RRR is given by: RRR = Risk-Free Rate + Risk PremiumHere, risk-free rate refers to the time value and risk premium adjusts ... Read More

What is meant by Time Preference or Time Value of Money?

Probir Banerjee

Probir Banerjee

Updated on 13-Aug-2021 14:28:43

Organizations and individuals usually prefer to receive money on an earlier date than receiving an equal sum on a later date. It is considered that the value of money goes through erosions with passing periods of time. That is why organizations try to receive payments as soon as possible.Note − ... Read More

What are the differences between Objective and Decision Criteria?

Probir Banerjee

Probir Banerjee

Updated on 13-Aug-2021 14:26:58

While we discuss wealth maximization the concepts of objective and decision criteria must be differentiated. At the first sight, the two criteria look similar. However, there are some inherent differences between the two. Knowing the differences is important because the companies deal with these criteria day in and day out.What ... Read More

Types of Financing Decisions - Investment Decisions, Dividend Policy Decisions

Probir Banerjee

Probir Banerjee

Updated on 13-Aug-2021 14:24:28

The decisions taken by financial managers on behalf of an organization for the long term are known as financing decisions. These decisions are important because every department is related to the finance department in one way or the other. Therefore, care must be taken related to the nature of financial ... Read More

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

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