How can Replacement Analysisbe used when the Required Service Period Is Long?

Q: What is the chief drawback of the high-low method of cost estimation? What problem could an outlier…

A:

Q: In a replacement analysis, why are the previous costs irrelevant?

A: Replacement Analysis is a capital budgeting method that determines whether existing assets need to…

Q: What can be understood by abnormal return?

A: Note firstly we understand what is meaning of abnormal return. Basic meaning of abnormal return is…

Q: Which one of the following techniques would most likely be used to analyze reductions in the time…

A: Learning curve is a graphical representation that reports the relationship between cost and the…

Q: What are Required Assumptions and Decision Frameworks for replacement analysis?

A: Replacement analysis:   It is an analysis tool in capital budgeting decisions. An asset life tends…

Q: Evaluate the following statement: “If a resource has unused capacity, that capacity is lost…

A: If a resource has unused capacity,that capacity is lost forever.

Q: What are some advantages of the Direct Write-Off method? What are some disadvantages of the Direct…

A: Direct Write Off Method: According to Direct Write off method, Bad Debt Expense is recognized once…

Q: What are the two shortcomings of the direct write-off method?

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Q: What type of Risks are exists in the conversion cycle?

A: Cash conversion cycle (CCC) CCC is a tool for tracking the time the company spends to get the cash…

Q: How efficient is an High-low method technique?

A: Using high low method, different types of costs can be separated.

Q: What are the Basic Concepts and Terminology of Replacement-Analysis?a

A: Assets: Assets are those items that provide value for money and future economic benefit for an…

Q: Describe the fundamentals of Replacement-Analysis?

A: Replacement analysis is the process where it is determined whether it would be beneficial to replace…

Q: What are the Replacement-Analysis Fundamentals?

A: Replacement analysis refers to the process where an organization determines whether it is beneficial…

Q: What are the risks that exist in the conversion cycle and the changes needed to reduce the risks?

A: The risks involved in the current system of the conversion cycle are as given below: There can be a…

Q: What is modified accelerated cost recovery system (MACRS)?

A: Any fixed asset purchased has a fixed life throughout which it has to be used. Over the course of…

Q: What is an outlier? List some possible causes of outliers. How should outliers be handled in cost…

A: Outlier: An outlier is a data point that falls far away from the other points in the scatter diagram…

Q: Explain Replacement-Analysis Fundamentals?

A: Replacement-analysis fundamentalUnder this, the decision regarding the replacement of obsolete as…

Q: Where did the phase out reduction come from?

A: Qualified Business Deduction QBI,(Qualified Business Deduction) which includes income from…

Q: Why runaway gap (technical analysis) occur? Explain.

A: Introduction : The mentality underlying a runaway gap would be that dealers who missed the initial…

Q: Explain Handling Unequal Service Life Problems in Replacement Analysis?

A: Companies often consider various options when it does the replacement projects. Companies come…

Q: How can thepayback method be useful?

A: Meaning:   The payback period is the time required to earn back the amount invested in a…

Q: How can we compare the alternatives with unequal service lives?

A: When making a decision between two investment alternatives, it may so happen that the alternatives…

Q: What are the risks associated with conversion cycle and changes need to reduce that risks?

A: Cash conversion cycle The cash conversion cycle is a method that tracks the time a company would…