Learn how to calculate amortisation and sinking fund during valuation of a firm. Calculation of Amortisation: Amortisation is the gradual and systematic writing off of an asset or an account over a period. The amount on which amortisation is provided is referred to as “amortizable amount”. Depreciation accounting is form of amortisation applied to depreciable assets. Depletion is a form [...]
In this article we will discuss about:- 1. Meaning of Bonds 2. Bond Value 3. Theorems 4. Computation of Future Cash Flows. Meaning of Bonds: Bonds are negotiable promissory notes that can be used by individuals, business firms, governments or government agencies. Bonds issued by the government or public sector companies in India are generally secured. Private sector companies may [...]
In this article we will discuss about the utility function of investors. Also learn about indifference curves. Utility Function and Risk Taking: Common investors will have three possible attitudes to undertake risky course of action: (i) An aversion to risk, (ii) A desire to take risk, and (iii) An indifference to risk. The following example will clarify the risk attitude [...]