What are some factors that influence: (1) a firm’sreceivables level and (2) the dollar cost of carryingreceivables?

Q: How does the lower of cost or market relate to profit margins?

A: Answer: The lower cost or market implies that, depending on how historical costs and market costs…

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: Which balance sheet might be most useful to an investor? a. U.S. GAAP balance sheet b. IFRS GAAP…

A: IFRS is principal based.

Q: When computing the Weighted Average Cost of Capital (WACC), what are the primary variables used?

A: The weighted average cost of capital (WACC), which includes common stock, preferred stock, bonds,…

Q: Why do firms need to calculate cost of financing using weights?

A: Financing refers to the management of large amount of money. It is a process of providing or raising…

Q: . How are the component costs combined to forma weighted average cost of capital (WACC),and why is…

A: It is the discounted rate that has been calculated by the company on the basis of which present…

Q: ain why the required rate of return on a firm's assets must be equal to the weighted average cost of…

A: Weighted average cost of capital is the weighted cost of equity and weighted cost of debt after…

Q: What is the difference of Cost of Equity and the required rate of return on equities?

A: The amount of money that would be transferred to a company's shareholders if all of the company's…

Q: What is operating profitability ratio (OP)?

A: These ratios evaluate a firm’s ability to earn profits. They help the stakeholders of the company to…

Q: Cost of Money is influenced by different factors”. What are those? How the cost of money is…

A: The cost of money or cost of capital is the minimum return a project has to generate for being…

Q: When calculating a company’s WACC, should book value, market value, or targetweights be used?…

A: A company often raises money from various sources such that it has to provide a return in the form…

Q: Discuss some financial variables that affect the price-earnings ratio?

A: The price-Earning Ratio refers to the ratio between earning per share and the current market price…

Q: What is operating profit margin?

A: The operating profit is the profit earned during the year after deducting all the operating expenses…

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 weighted average cost of capital?

A: The formula to compute weighted average cost of capital as follows:

Q: Does weighted average cost of capital is similar to Cost of Capital?

A: Cost of capital refers to the return expected by the company for making investments in projects or…

Q: How does the cost system affect the financial position of the firm?

A: Cost system is the system which is designed to evaluate the monitor the cost incurred by the…

Q: What is the difference between the Company cost of capital and  project cost of capital?

A: Cost of capital of a company is also called as weighted average cost of capital.  It considers the…

Q: Explain the relationship between the weighted average cost of capital (WACC), the maximization of…

A: Optimal capital structure of the firm explains the relationship between the weighted average cost of…

Q: When is WACC (weighted average cost of capital)  commonly used

A: The weighted average cost of capital represents the rate that has been expected to pay to the…

Q: What is the gross margin percentage for the firm as a whole?

A: Gross margin = Revenue - Cost Gross Margin % = Gross Margin/Revenues We will assume that all the…

Q: What is the cost constraint, and how does it affect financial reporting?

A: Under financial accounting, constraints are referred to as boundaries or guidelines prescribed in…

Q: In what way are profitability and efficiency related? How are profitability and liquidity related

A: The question explains about profitability and efficiency related and profitability and liquidity…

Q: 1. What are the components of a working capital? Is it important? Why or why not?  2. What is the…

A: 1. Working capital is the difference between the current assets of the company and the current…

Q: Describe how the following factors affect external capitalrequirements: (1) payout ratio, (2)…

A: The funds which are raised externally i.e from outside sources is called external financing. The…

Q: 3. Explain the relationship between the weighted average cost of capital (WACC), the maximization of…

A: The question is based on the concept of Weighted average cost of capital (WACC), maximization of…

Q: Is the accounting rate of return (ARR) the same thing as the return on investment (ROI)?

A: Yes, Accounting rate of return (ARR) the same thing as the Return on investment (ROI). The…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.