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2021_CFA_B4_Corporate Finance, Equity Investments, and Fixed Income, 36…
2021_CFA_B4_Corporate Finance, Equity Investments, and Fixed Income
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32_Capital Budgeting
32.1 Capital Projects, NPV, and IRR
32.a: capital budgeting process and distinguish categories of capital projects
- capital budgeting process
- Idea generation
- Analyzing project proposals
- Create the firm-wide capital budget
- Monitoring decisions and conducting a post-audit
- categories of capital budgeting projects
32.b: describe basic principles of capital budgeting
- key principles
- Decisions are based on cash flows not accounting income
- sunk cost
- externalities
- cannibalization
- conventional / unconventional cash flow pattern
- Cash flows are based on opportunities costs
- The timing of cash flows is important.
- Cash flows are analyzed on an after-tax basis
- Financing costs are reflected in the project's required rate of return.
32.c: How evaluation and selection of capital projects
- Independent vs. mutually exclusive projects
- Project sequencing
- Unlimited funds vs. capital rationing
32.d: calculate NPV, iRR, payback period, discounted payback period, and PI
32.2 Payback period, project rankings
32.e Explain NPV profile and describe the problems
- NPV profile
- crossover rate
- relative advantages and disadvantages of NPV and IRR methods
- NPV
- key advantage
- key disadvantage
- IRR
- key advantage
- key disadvantage
- Payback Period
- Discounted Payback Period
- Profitability Index
32.f: Contrast NPV vs. IRR decision rule
- Conflicting project rankings
- NPV only acceptable criterion when ranking projects
- cash flow timing differences
- 計算cash flow不同的狀況下，IRR和NPV呈現選擇不同
32.g: Describe relations among NPV, company value, share price
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38_Market Efficiency
38.1 Market efficieny
38.a: Describe market efficiency and related concepts, including their importance to investment practitioners.
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38.d: Contrast weak-form, semi-strong-form, and strong form market efficiency
38.e: Explain the implications of each form of market efficiency for fundamental analysis, technical analysis, and the choice between active and passive portfolio management
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43_Fixed-Income Markets: Issuance, trading, and funding