Applying microcomputers to capital budgeting decisions

Article Abstract:

Capital budgeting decisions can be improved using microcomputers. Two basic techniques include the net present value (NPV) and internal rate of return (IRR) methods. The difference between NPV and IRR is primarily that NPV focuses on the net present value of an investment alternative at a predetermined interest rate, while the IRR method focuses on determining the interest rates where the net present value of an investment is zero. The usual application of both approaches requires specific amounts and timing of future cash flow for investment options. Cost of investment capital must also be known. With these factors known, it is possible to analyze both normal and unusual investment strategies, using a microcomputer. The advantages of a computer are more information, 'what if' software capability, potential outcome perspective, and simplicity.

Methods, Usage, Software, Microcomputers, Cash flow, Investment analysis, Securities analysis, Capital budgets

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Raising risk capital on the third market

Article Abstract:

The unlisted securities market (USM) once consisted of high risk companies that were not listed on the London Stock Exchange. After these firms became popular in the risk-funding market, the Exchange co-opted or listed them. These securities are now considered the 'junior market'. A new group of securities arose which were deemed safer than USM issues, collectively referred to as the over-the-counter-market (OTC). The London Stock Market has again absorbed this market, and a new one, the Third Market is taking its own and the USM's place. The Third Market has the same essential characteristics as its predecessors, and will itself be assimilated by the OTC or the Stock Exchange.

Security brokers and dealers, Evaluation, Investments, Securities, Scotland, London Stock Exchange PLC, Over-the-counter markets, Over the counter markets, Great Britain

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