abis the net cash (selling price less selling costs) that the firmwould receive if it sold the asset today, in an orderly fashion in anarm's-length transaction. It is an example of an exit value because itreflects a price that the firm would receive in a transaction in whichan asset leaves the firm.a. Current Replacement Costb. Net Realizable Valuec. Fair Valued. Present Value of Future Net Cash Flowse. Acquisition cost

Step 1: Definition of Asset Valuation Methods:A business acquires many assets throughout its life.…

Answered: ab is the net cash (selling price less…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 12MC: Which of the following does nor assign a value to a business opportunity using time-value...

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This calculation determines profitability or growth potential of an investment, expressed as a percentage, at the point where NPV equals zero A. internal race of return (IRR) method B. net present value (NPV) C. discounted cash flow model D. future value method
Which of the following discounts future cash flows to their present value at the expected rate of return, and compares that to the Initial Investment? A. internal rate of return (IRR) method B. net present value (N PV) C. discounted cash flow model D. future value method
One method for calculating enterprise value includes the present value of which of the following cash flows? a. Terminal value of firm free cash flow from operations.b. Nonoperating income from planning period.c. Terminal value of nonoperating income.d. Firm free cash flow from planning period.e. All of the above.
The present value of an investment's future cash flows divided by its initial cost is the: O Net present value. O Internal rate of return. O Average accounting return. O Profitability index. O Payback period.
FAR- Conceptual Framework Kindly help me answer the following : 1. Which of the following should be considered a current value measure? * a. Replacement cost and discounted cash flow b. Replacement cost and exit value c. Replacement cost, exit value and discounted cash flow d. Exit value and discounted cash flow 2. Obligations to transfer an economic resource include all, except * a. Obligation to provide services b. Obligation to pay cash c. Obligation to transfer an economic resource even if a specified future event does not occur d. Obligation to deliver goods 3. Which is not a purpose of the Conceptual Framework? * a. To assist accountants in selecting among alternative accounting and reporting methods. b. To provide definitions of key terms and concepts. c. To assist IASB in the standard-setting process. d. To provide specific guidelines for resolving situations not…
Which of the following statements is true for historical cost valuations? (Select one or more) a. Present value of cash flows using historical interest rates is an item in which cash receipts or cash payments will occur over time, these future cash flows are then discounted at the interest rate in effect at the time of the initial transaction. Balance sheet examples include notes receivable and notes payable. b. Acquisition cost is the amount paid initially to acquire the asset, examples include prepayments, land, and intangibles with indefinite lives. c. Acquisition cost is the amount paid initially to acquire the asset, examples include amounts invested in research and development for intellectual property. d. Adjusted acquisition cost is the amount paid initially to acquire an asset less accumulated depreciation and amortization, examples include equipment and intangible assets with limited lives.
Which of the following are assumptions of the Capital Asset Pricing Model (CAPM)? Check all that apply. Consider the equation for the Capital Asset Pricing Model (CAPM): All assets are perfectly divisible and liquid. Investors assume that their investment activities won't affect the price of a stack. 7 = TRF + (TM - TRF) X bi -0.50 There are no transaction costs. 0.30 Assets have unique liquidity. In this equation, the term (M - TRF) represents the 1.00 Suppose that the market's average excess return on stocks is 12.00% and that the risk-free rate is 1.00%. Complete the following table expected returns to stocks for each beta coefficient using the Capital Asset Pricing Model (CAPM): 3.00 Cov(ri, TM) 02 M Expected Return to Stocks (%) Based on the CAPM and your calculations for the return to stocks, what does it mean when the coefficient b; > 1? O The stock's return correlates with the stock market as a whole. The stock is more volatile than the market.
Discounting an investment’s cash flows using the internal rate of return will result in which of the following? Group of answer choices net present value of one net present value of zero positive net present value negative net present value
1. In discounted cash flows method, the value of investment opportunities is highly dependent on the value that the asset will generate from now until the future. True False 2. Discounted cash flows analysis can be done by determining the present value of the Net Cash Flows of the investment opportunity. True False 3. The amount that should be included in determining the value of the asset is the amount of cash that will be available for the claims of the equity owners and creditors. True False 4. Relevance and reliability of information are important in financial modelling. True False 5. In financial modeling, the usual growth indicators used are inflation, population growth and GNP/GDP growth. True False 6. In financial modelling, you need the inflation to be used as driver for certain operating and capital expenditures. True False 7. The value of a firm's invested capital is Php300 million. Its return on invested capital is 12 percent, and its WACC is 10.5 percent. What is the…
The future value of an uneven cash flow stream is also referred to as its discounted value amortized value consolidated value terminal value O periodic value
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The discounted payback method discounts cash flows at the opportunity cost of capital and then calculates the payback period. TRUE/FALSE?

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