ACC223:FINANCIAL DECISION MAKING-II

L:3 T:2 P:0 Credits:5

Course Outcomes: Through this course students should be able to

CO1 :: evaluate cost-volume-profit relationships and conduct marginal analysis to optimize

profitability

CO2 :: develop effective pricing strategies and incorporate various pricing methodologies in
different market contexts

CO3 :: analyze and manage different types of risks for effective risk mitigation strategies

CO4 :: apply NPV and IRR methods to identify the most appropriate investment opportunities

CO5 :: assess capital investments using payback and discounted payback methods and conduct
risk analysis
CO6 :: employ ethical practices and code of conduct for organizational integrity and sustainability

Unit I
Cost volume profit analysis : breakeven analysis, profit performance and alternative operating
levels, analysis of multiple products
Marginal analysis : sunk costs, opportunity costs, marginal costs & marginal revenue, special orders
and pricing, make versus buy, sell or process further, add or drop a segment, capacity considerations
Unit II
Pricing : pricing methodologies, target costing, elasticity of demand, product life cycle
considerations, market structure considerations
Unit III
Risk management : types of risk, risk identification and assessment, risk mitigation strategies,
managing risk
Unit IV
Capital budgeting : stages of capital budgeting, incremental cash flows, income tax considerations

Discounted cash flow analysis : net present value, internal rate of return, comparison of NPV and
IRR
Unit V
Payback and discounted payback : uses of payback method, limitations of payback method,
discounted payback
Risk analysis in capital investment : sensitivity and scenario analysis, real options

Unit VI
Professional ethics : business ethics, ethical considerations for management accounting & financial
management professionals, ethical considerations for the organization

Text Books:
1. CMA PART 2: FINANCIAL DECISION MAKING by VARUN JAIN, MILES PUBLICATIONS
PRIVATE LIMITED
References:
1. CMA EXCEL LEARNING SYSTEM EXAM REVIEW 2016 PART 2: FINANCIAL DECISION
MAKING by INSTITUTE OF MANAGEMENT ACCOUNTANTS, WILEY

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