OBJECTIVE : To explain how financing for entrepreneurship is done.
– Project planning & Project Appraisal:
Concepts Capital Expenditures - Importance and difficulties - Phases of Capital budgeting
Levels of Capital budgeting - Estimation of Project Cash flows -Expenditures - Time value of
money.Pay back period - NPV of inflows - IRR concepts -Cost of acquiring capital - Planning
of portfolio. Risk Analysis - Economic Risk -Industry Risk - Company Risk - Financial Risk.
- Sources of Finance:
Various sources of Finance available: Long term sources -Equity Shares, Preference Shares
and debentures- Kinds Private Placements- IPO-SEBI- FDI- Institutional Finance - Banks -
IDBI, IFCI, IIBI, ICICI, SIDBI, SFC's in India - Merchant Banks in India - NBFC's in India -
their way of financing in India for small and medium business.
- Short Term Sources:
Short term sources: Short term sources - banks and financial Institutions that give short term
finance - Bills Discounting - Factoring - Working Capital - Concepts - Importance -Cash
Management - Inventory Management - Receivables Management - Sources of Working
- Venture Capital, Hire Purchase And Leasing:
Venture capital - Meaning - origin - Importance - Venture capital in India - Benefits. Hire
Purchase - Concept - Evaluation of Hire Purchase Proposals - Leasing - Overview -Tax
aspects - Lease Accounting - Evaluation of Leasing Proposals.
- Preparing the Financing Plan
General considerations-Construction Financing- Long term financing- Withholding Tax
Considerations- Estimating the Borrowing capacity of a project- Loan repayment
Parameters- Borrowing Capacity-, Assuming full Draw down Immediately prior to project
Completion & Periodic Loan Draw downs- applications to Hypothetical High Speed rail
Project- Annual Coverage Tests.
MBA Common Subjects