A machine cost P1,500,000 and will have a scrap value of P150,000 when retired at the end of 15 years. If money is worth 4.8%, find the annual investment and the capitalized cost of the machine.

Q: Define each of the following terms:g. Market Value Added; Economic Value Added

A: We can define the terms as follows:

Q: Explain the following basic principles in cost management: a. profits b. life cycle costs c.…

A: Cost ManagementCost management is the process of organizing and overseeing a company's spending…

Q: What is market value ratio?

A: Ratio is the relation between two different quantities obtained after dividing one by another.

Q: Differentiate between price risk and reinvestment risk.

A: Price risk is the risk of decline of the price of the investment or an asset after the underlying…

Q: Discuss the following components of break-even analysis: fixed costs, variable and semi-variable…

A: Break-even point: It is the point at which the contribution margin earned on sales is equal to fixed…

Q: Explain the effect of issuance cost on firm value.

A: There are issues cost associated with debt and equity that has impact on  value of firm.

Q: Write the capitalized-cost equation?

A: Answer: Capitalized cost is well-defined as the present value of an annual cost constant over an…

Q: When computing the Weighted Average Cost of Capital (WACC), what are the primary variables used?

A: The weighted average cost of capital (WACC), which includes common stock, preferred stock, bonds,…

Q: how the cost of capital serves as a screening tool when dealing with the net present value method…

A: Answer with explanation are as follows. cost of capital - cost of capital is a expected rate of…

Q: Describe the Market-Value Analysis?

A: Market Value is a solid indicator of investor or shareholder capital. All things considered, what…

Q: Describe following:* Market approach* Income approach* Cost approach

A: Market Approach:   Market approach is a method used to assess the value of an asset depending on the…

Q: Present and Explain the theories of the Yield Curve?

A: The yield curve is a curve that shows the relationship between the interest rates and the different…

Q: What is the total investment approach?

A: Total Investment Approach: In the Total Investment Approach, there is a risk-return tradeoff in the…

Q: Explain the assumptions of Capital Asset Pricing Model

A: It is providing the relationship between the expected rate of return and the systematic risk of the…

Q: Explain how useful the price mechanism is in tackling the basic economic problem?

A: the main role of price mechanism in basic economic problem is allocate scare resources in market…

Q: Define the term current market value.

A: The current market value (CMV) gives parties interested in making a transaction the approximate…

Q: What is the significance of finding the internal rate of return?

A: IRR helps to check the viability of the project. If IRR is more than Kc than Project seems to be…

Q: What is the economic rationale for the cost approach? Under what conditions would the cost approach…

A: Answer: Economic rationale for cost approach: The cost approach means that the person who is…

Q: What is the relationship between profitability and efficiency, liquidity, investment, and efficiency…

A: (1) Financial Ratios will express financial Quantity concerning another financial ratio. (2) These…

Q: What is current market value? Describe about it.

A: Market value: Market value is the price at which, both seller and buyer agree to exchange the…

Q: how present value is useful in economic decision making

A: Present value (PV) is the current value of a future sum of money or a stream of cash flows, given a…

Q: Compare and contrast the historical cost accounting model with the fair value accounting model. What…

A: The cost accounting model is a method of accounting that focuses on the measurement, analysis, and…

Q: Discuss the following models in relation to purchasing power parity.

A: Comparative rates of inflation in different countries are the factors influencing the exchange rate.…

Q: Derivation of capital asset pricing model

A: The Capital Asset Pricing Model (CAPM) relates the returns on individual assets or entire portfolios…

Q: Define Capital Asset Pricing Model (CAPM)

A: The CAPM or capital asset pricing model is considered to be a popular concept in finance. The main…

Q: Define target payout ratio

A: SOLUTION:- A target payout ratio is a degree of the proportion of a company's profits it would want…

Q: Which are the several ways of defining the concept of rate of return on investment?

A: Answer: Return on investments is an instrument which can be used to calculate the company’s…

Q: What are opportunity costs? Explain why opportunity costs are not recorded in financial accounting…

A: The advantage that was forfeited by not selecting an option is known as the opportunity cost. The…

Q: impacts  of inflation on money investment

A: Inflation occurs when prices across a sector or an industry increases, thereby decreasing the…

Q: Explain the difference between return of investment versus return on investment.

A: The ratio analysis helps to analyze the financial statements of the business.