arbitrage profit can an investor earn on an investment value

Q: Which capital investment methods require the use of a present value table?

A: Net Present Value: It is a measure of profitability for a project used primarily in capital…

Q: Does the accounting (book) rate of return (ARR) method provide a valid (or, meaningful) measureof…

A:

Q: Explain what net operating working capital is, and explain how changes in that quantity can affect…

A: Net operating working capital is defined as excess of current operating assets over current…

Q: How are human and physical capital investment decisions similar? How do they differ? What determines…

A: Physical capital is the stock of equipment and structures used as an input to produce goods and…

Q: What are the absolute measures of investment worth?

A: There are various approaches that can be utilized to decide a value or worth for the venture. Net…

Q: What is a satisfiable investment? When the present value of benefits surpasses the cost of an…

A: This question explains about the present value of benefits surpasses and the cost of an investment…

Q: When is a firm's investment pool equal to the MARR?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

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: The payback method measures: The profitability of an investment. The net cash inflow from an…

A: Pay back period is most popular method of capital budgeting decisions and is quite simple to use and…

Q: Discounting an investment’s cash flows using the internal rate of return will result in which of the…

A: Introduction: The internal rate of return (IRR) is a research and consulting metric used to assess…

Q: Do the financial statements provide the basis for future investment analysis?

A: Yes, financial statements are helpful in providing the base for the analysis of investment in the…

Q: why net present value is considered to be superior to internal rate of return as an investment…

A: Investment- The purchase of an asset in order to generate income or capital gain is referred to as…

Q: is the difference between the gross present value of the benefits of that action and the amount of…

A: Net present value is the difference between the present value of future cash inflows and cash…

Q: Differentiate between a capital investment and an expense investment

A: Investment refers to the allocation of the funds in the assets in order to get returns. The…

Q: When is a gain or a loss from a cash flow hedge reported in earnings?

A: Cash flow hedge: If a company uses any derivative to cover the risk due to cash flow changes to…

Q: How is working capital handled in the calculation of cash flows from a capital investment? Is it…

A: Working capital or net working capital is equals to firm’s current assets minus current liabilities,…

Q: Capitalizing a cost involves increasing what type of account?a. Liabilityb. Expensec. Stockholders’…

A: An asset is something which contains future economic value or future benefit.  A liability is…

Q: Describe the affects of the present value of an investment.

A: Present value of the investment: Present value of the investment is calculated using the cash flows…

Q: Explain the fundamental equivalence of valuation based on expected future dividends free cash flows…

A: Introduction: The valuation for dividends, cash flows & earnings generally vary in their own…

Q: Why is the operating return on assets ratio also referred to as the operating returnon investment?

A: Introduction: Operating asset return is nothing but a profitability measure and it is a difference…

Q: What is the limitation of payback method as a form of investment appraisal?

A: Payback period is the length of time it takes for an investment to generate enough cash flows to…

Q: hich of the following characteristics would an investor place a greater priority on for a short-term…

A: Investment is placing the extra money to make profit and return on investment and investment may be…

Q: How can the Calculation of capital-recovery cost (with return)be done?

A: Capital Recovery Cost: When a company purchases or invest in some assets for the business…

Q: The expected value of an investment: Answer a. Is what the owner will receive when the investment is…

A: Expected Return refers to return anticipated by an investor while making investment. It may differ…

Q: which ratio is of greater interest to the owner-manager, the rate of return on total assets or the…

A: The ratio refers to the measure that determines the relation between two numbers. In accounting, the…

Q: The account Unrealized Gain (Loss) on Trading Investments should be included on the

A: Unrealized gains and losses: These are gains and losses which are unrealized and are the result of…

Q: Explain how differential weight to losses and gains effect investment decisions?

A: Prospect Theory assigns differential weight to losses and gains for making investment decisions.

Q: Advantages and Disadvantages of 1. Other Investment Assets 2. Alternatives to Fixed Income and…

A: The investment assets are the avenues in which the investors can infuse their funds for getting some…

Q: What are the measures of investment worth based on yield? What are they called?

A: Investment worth based on yield means that an investor is expecting certain income on an investment…

Q: An investment is the use of money or capital for income or​ _______. expenses profit value present…

A: An investment is an item or an asset acquired with the goal of earning income or appreciation in the…

Q: Profit maximization translated into wealth maximization. Discuss

A: Wealth Maximization consists of a set of activities that manage the financial resources intending to…

Q: ith the use of an example, briefly explain the main difference between the ex-ante and the ex-post…

A: Main Difference between ex-ante and the ex-post opportunity cost of capital: Ex-post risk is…

Q: how value drivers (Return on Equity, Net Profit Margin, and Total Asset Turnover) are related to…

A: Financial statements: Financial statements are the summary of transactions presented in the form of…

Q: What is the difference between a cash basis and an accrual basis measure of performance?

A: Cash Basis :- It is an Accounting Method where Revenue and Expense are identify at the time of…

Q: A reasonable probability that an investment will produce a loss a. risk b. value c. specualtion…

A: There are several investment styles through which one can generate profits or build wealth.

Q: Discuss, using practical why capital ratio is used to share a loss on realization

A: The ratio is used because the partners having more capital is liable for more loss and the partner…

Q: Which of the following is an economic motivation for an acquisition? Using a cash surplus. b.…

A: When there is cash surplus and there is a means to park such surplus then acquisition is one option.…