31. Explain briefly the functions of Treasury Department?
The functions of treasury department management is to ensure proper usage, storage and risk management of liquid funds so as to ensure that the organization is able to meet its obligations, collect its receivables and also maximize the return on its investments. Towards this end the treasury function may be divided into the following:
(i) Cash Management: The efficient collection and payment of cash both inside the organization and to third parties is the function of treasury department. Treasury normally manages surplus funds in an investment portfolio.
(ii) Currency Management: The treasury department manages the foreign currency risk exposure of the company. It advises on the currency to be used when invoicing overseas sales. It also manages any net exchange exposures in accordance with the company policy.
(iii) Fund Management: Treasury department is responsible for planning and sourcing the company’s short, medium and long-term cash needs. It also participates in the decision on capital structure and forecasts future interest and foreign currency rates.
(iv) Banking: Since short-term finance can come in the form of bank loans or through the sale of commercial paper in the money market, therefore, treasury department carries out negotiations with bankers and acts as the initial point of contact with them.
(v) Corporate Finance: Treasury department is involved with both acquisition and disinvestment activities within the group. In addition, it is often responsible for investor relations.
32. Define Modified Internal Rate of Return method?
Modified Internal Rate of Return (MIRR): There are several limitations attached with the concept of the conventional Internal Rate of Return. The MIRR addresses some of these deficiencies. For example, it eliminates multiple IRR rates; it addresses the reinvestment rate issue and produces results, which are consistent with the Net Present Value method.
Under this method, all cash flows, apart from the initial investment, are brought to the terminal value using an appropriate discount rate(usually the cost of capital). This results in a single stream of cash inflow in the terminal year. The MIRR is obtained by assuming a single outflow in the zeroth year and the terminal cash inflow as mentioned above. The discount rate which equates the present value of the terminal cash in flow to the zeroth year outflow is called the MIRR.
33. What is Finance for Non-Financial Managers?
All managers need to understand finance if they are to play an active role in helping their organization achieve its objectives. Not all managers need the same level of skill and understanding as specialist financial managers, but a good knowledge of the key concepts of prudent financial management - such as modern financial accounting - should equip non-financial managers with the knowledge they require.
The Finance for Non-Financial Managers qualification is designed to provide both employers and employees with independent verification of the financial knowledge of managers who do not directly work within a finance role.
34. Which languages is the Finance for Non-Financial Managers examination available in?
The Finance for Non-Financial Managers examination is currently only available in English.
35. Can I use the Finance for Non-Financial Managers logo?
The Non-Financial Managers logo may only be used with the permission of APMG-International. However, if APMG-International believe the logo is being used in an inappropriate manner, then we may insist that the logo is used in a suitable alternative manner or is withdrawn from use. All materials that will contain the logo must be submitted to APMG-International for approval before publication.
More Questions & Answers :-
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The functions of treasury department management is to ensure proper usage, storage and risk management of liquid funds so as to ensure that the organization is able to meet its obligations, collect its receivables and also maximize the return on its investments. Towards this end the treasury function may be divided into the following:
(i) Cash Management: The efficient collection and payment of cash both inside the organization and to third parties is the function of treasury department. Treasury normally manages surplus funds in an investment portfolio.
(ii) Currency Management: The treasury department manages the foreign currency risk exposure of the company. It advises on the currency to be used when invoicing overseas sales. It also manages any net exchange exposures in accordance with the company policy.
(iii) Fund Management: Treasury department is responsible for planning and sourcing the company’s short, medium and long-term cash needs. It also participates in the decision on capital structure and forecasts future interest and foreign currency rates.
(iv) Banking: Since short-term finance can come in the form of bank loans or through the sale of commercial paper in the money market, therefore, treasury department carries out negotiations with bankers and acts as the initial point of contact with them.
(v) Corporate Finance: Treasury department is involved with both acquisition and disinvestment activities within the group. In addition, it is often responsible for investor relations.
32. Define Modified Internal Rate of Return method?
Modified Internal Rate of Return (MIRR): There are several limitations attached with the concept of the conventional Internal Rate of Return. The MIRR addresses some of these deficiencies. For example, it eliminates multiple IRR rates; it addresses the reinvestment rate issue and produces results, which are consistent with the Net Present Value method.
Under this method, all cash flows, apart from the initial investment, are brought to the terminal value using an appropriate discount rate(usually the cost of capital). This results in a single stream of cash inflow in the terminal year. The MIRR is obtained by assuming a single outflow in the zeroth year and the terminal cash inflow as mentioned above. The discount rate which equates the present value of the terminal cash in flow to the zeroth year outflow is called the MIRR.
33. What is Finance for Non-Financial Managers?
All managers need to understand finance if they are to play an active role in helping their organization achieve its objectives. Not all managers need the same level of skill and understanding as specialist financial managers, but a good knowledge of the key concepts of prudent financial management - such as modern financial accounting - should equip non-financial managers with the knowledge they require.
The Finance for Non-Financial Managers qualification is designed to provide both employers and employees with independent verification of the financial knowledge of managers who do not directly work within a finance role.
34. Which languages is the Finance for Non-Financial Managers examination available in?
The Finance for Non-Financial Managers examination is currently only available in English.
35. Can I use the Finance for Non-Financial Managers logo?
The Non-Financial Managers logo may only be used with the permission of APMG-International. However, if APMG-International believe the logo is being used in an inappropriate manner, then we may insist that the logo is used in a suitable alternative manner or is withdrawn from use. All materials that will contain the logo must be submitted to APMG-International for approval before publication.
More Questions & Answers :-
Part1 Part2 Part3 Part4
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