If a company were filing a claim for compensation with an insurance company for manufacturi equipment damaged in a flood, what method of valuation for the equipment would be most relevant? Historical cost Net realizable value Depreciated historical cost Replacement cost

Q: Contribution margin means

A: In the production there are many types of cost some cost change with volume but some do not change…

Q: Define cost-volume-profit analysis?

A: Cost-Volume-Profit Analysis (CVP Analysis): CVP Analysis is a tool of cost accounting that measures…

Q: In what sense can a variable cost be considered constant?

A: A variable cost is a constant amount per unit produced or used.Therefore the total amount of the…

Q: What is net present value?

A:

Q: Give an example of an irrelevant future cost. Why is it irrelevant?

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Q: Understand and apply the lower-of-cost-or-net realizable value rule.

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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: How is the payback period determined?

A:

Q: What is fundamental value or price?

A: Fundamental value is a measure of what an asset's worth. This gauge is acquired by methods for an…

Q: What is intrinsic value or price?

A: Intrinsic value: Intrinsic value denotes to an investor's view of the intrinsic worth of an asset,…

Q: What is multistage valuation model?

A: The multi-stage dividend discount model is an equity valuation model that expands on the Gordon…

Q: Does the IRR measure ignore the scale of investment?

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

Q: What is the relevant range? How does fixed costs and variable costs behave outside the relevant…

A: Relevant range refers to the level of the activity which represents the maximum and minimum limits…

Q: What discount rate is used in a lessor’s NPV analysis?

A: Weighted average cost of capital is used as discount rate in Lessor's NPV analysis.

Q: What is interpretation of the usefulness of the contribution margin concept?

A: Contribution margin The additional profit gained for each unit sold is calculated by subtracting the…

Q: What is net operating margin ?

A: operating profit is the companies earnings after deducting operating expenses.  operating profit =…

Q: What does it mean to externalize costs?

A: Externalizing costs means generating profits by reducing the indirect costs by imposing them on…

Q: Which costs make up “prime” costs？

A: Prime cost is that cost, which is directly concerned with the product such as direct material,…

Q: What is target profit?

A: Target costing:   Target costing is a business procedure that targets the cost at the earliest…

Q: Explain different terms are used to refer to rate of return?

A: Answer: Rate of return is nothing but the returns that are expecting on investments made by…

Q: What does the Unit contribution margin express?

A: Break Even Point:                 Break Even Point is defined as the level where there is no profit…

Q: Which investment return, expected or actual, does GAAP allow in the calculation of benefit cost?

A: Benefit cost: When an entity creates a benefit plan setting aside some moneys to meet future…

Q: What are the Relationship between Yield and Time?

A: Yield refers to the measurement of returns of an investment in a period of time. It measures the…

Q: What is Capitalized-Equivalent Cost?

A: Cost is the price of something that buyer pays to the seller to purchase that thing.