State why payback analysis should be used only as a supplemental analysis tool when an economic study is performed.

Q: Match each of the following terms with the best definition. A. Theory of constraints B. Sunk cost…

A: Given the following question: Theory of constraints Sunk cost Differential analysis Opportunity…

Q: What is the Joint Hypothesis and what are its implications for tests of asset pricing models?

A: The Capital Asset Pricing Model (CAPM) is a model that explains the relationship between expected…

Q: Capital Asset Pricing Model is based on certain assumptions, which have been criticized after…

A: Asset pricing is a linear function of the beta value of market return: When the market returns…

Q: state the limitations of the payback pe

A: Answer : The payback period is the quantity of time needed for cash inflows generated by a project…

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 principal objection to the payback method?

A: The Payback period is one of the traditional or non-discounting techniques of Capital budgeting. It…

Q: What are the main criticisms of the Capital Asset Pricing Model (CAPM)? What does the empirical…

A: Capital Asset Pricing Model is a financial theory stating the linear relationship between required…

Q: explain why payback period is not a preferred method

A: The payback period is a period in which the total costs of an investment are recovered through cash…

Q: Identify and differentiate or define the types of

A: There are mainly two types of payback analysis : 1. Payback period 2. Discounted payback period

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: Analyze the disadvantages of financial performance measures and the advantages of non

A: Disadvantages of financial performance measures  1 They indicates short term performance measures. 2…

Q: What is the primary disadvantage of utilizing revenue from operations to evaluate investment…

A: Investment centers are businesses that invest in other companies to boost their profits.

Q: What are some possible financial decisions in which using the Rate formula might be helpful

A: An interest rate, denoted r, is a rate of return that reflects the relationship between differently…

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: List the advantages and disadvantages of the payback method.

A: Payback method is a capital budgeting method which helps to evaluate an investment based on the time…

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

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

Q: With example, explain the difference between induced and indirect economic impact.

A: Answer:- Economic impact definition:- An economic impact study investigates the effects of a certain…

Q: “Explain the reasons why the net present value (NPV) method of investment appraisal is likely to be…

A: The Net Present Value (NPV) is a company's financial tool used to estimate the viability of…

Q: What are some limitations of financial performance measures?

A:

Q: What are some criticisms of the payback method?

A: Payback Period: Payback period is the period in which the project recovers its initial cost of the…

Q: Explain why sunk costs are not considered in the analysis ofinvestment alternatives.

A: A sunk cost is also known as the retrospective cost, is a cost that cannot be recovered because it…

Q: s it important to identify what costs will be eliminated in the conduct of finan

A: Turnaround recovery ways are a variety of measures that corporations use to get over a amount of a…

Q: What is the financial advantage (disadvantage) of further processing the intermediateproduct?

A: Further Processing means carrying the production of goods to another level and shifting its…

Q: Briefly explain the problems associated with the payback method.

A: Capital budgeting is referred as the process of decision making which is used by companies to…

Q: What are the weaknesses of the payback method?

A: Payback period is the amount of time required for firm to recover its initial investment in projects…