What is the effect of changes in cash flows, investment cost and cash outflows on profitability (present value) index     Profitability index will decrease with an increase in cash flows, a decrease in investment cost, or a decrease in cash outflows. Profitability index will decrease with an increase in cash outflows, an increase in investment cost, or an increase in cash inflows. Profitability index will increase with an increase in cash inflows, an increase in investment cost, or an increase in cash outflows. Profitability index will increase with an increase in cash flows, a decrease in investment costs or a decrease in cash outflows.

Q: What is Internal Rate of Return - Variable Cash Flows with Reversion?  Please provide examples.

A: The internal rate of return is the one of the discounted techniques of capital budgeting which is…

Q: If the sum of the incremental cash flows is negative, what is known about the rate of return on the…

A: Incremental Analysis: The method to measure the viability of different options related to business…

Q: A conservative approach to reinvesting projected cash flows (the reinvestment assumption) would use…

A: “Hey, since there are multiple different questions posted, we will answer first question. If you…

Q: Which of the following is true about present value calculations? Other things remaining equal, the…

A: The value of any cash flow at immediate current date is called the present value(PV) which is…

Q: The time value of money concept is given consideration in long-range investment decisions by  Group…

A: The time value of money concept is given consideration in long-range investment decisions by :

Q: expected value of cash flow is    Options :   certain to occur most likely cash flow…

A: Expected Cash Flow:  Predicted cash flow from a project prior to the start of the project. You may…

Q: Analysis of sales (the independent variable) to cash flows (the dependent variable) data for linear…

A: The intercept is the estimated value of the dependant variable y when x=0.

Q: This method evaluates the return of an investment by dividing the annual average income by the…

A: By dividing the annual average income by the average investment, return on investment is calculated.…

Q: How would a reduction in the cash conversion cycle increase profitability?

A: Cash conversion cycle (CCC): It is a metric that speaks to the time it takes for a business…

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: Where is the short term investment shown in the Cash flow statement?

A: A short-term investment: It also known as a temporary investment or marketable security. It is a…

Q: chance that a cash flow will turn out to be worse than the estimate. b. the chance that a…

A: Step 1 The planning process used to assess whether an entity's long-term investment is appropriate…

Q: Describe the strengths and weeknesses of the following:: Cash payback period Adverage accounting…

A: As you have given multiple questions, first 3 will be answered. Please re-post the question for…

Q: nds that it can draw on. o reduce collection time t wear to operate.

A: Lock box is a system where that can be utilized to reduce the time between customer sending a check…

Q: Suppose an investment has conventional cash flows with positive NPV. How would it impact your…

A: Net Present Value is Positive of the project. Impact of these measurements on the decision of…

Q: What is Internal Rate of Return - Monthly Fixed Cash Flows with Reversions?  Please provide…

A: The internal rate of return is the one of the discounted techniques of capital budgeting which is…

Q: The net present value: is equal to the initial investment when the internal rate of return is equal…

A: The net present value is determined by, The Net present value (NPV) is defined as the difference…

Q: All of the following statements regarding NPV are true EXCEPT: a. A positive NPV indicates the…

A: Net Present Value : It is the net of present value of cash inflow and present value of outflow.…

Q: Describe the annual cash flow analysis, which presents measures of investment worth based on yield?

A: The question is based on the concept of cash flow and its analysis in terms of discounted value of…

Q: Which capital budgeting technique measures all expected future cash inflows and outflows as if they…

A: Based on the cost of capital the net present value method discounts the future cash flows (both cash…

Q: Prepare a cashflow forecast, Use investment appraisal techniques to calculate Net Present Value…

A: Net Present Value=(Present Value of Cash Inflows-Present Value of Cash Outflows)

Q: c. Use arrows to demonstrate, on the time line in part b, how discounting to find present value can…

A: NPV or Net present value method is a capital budgeting method to compare any two or more similar…

Q: Does an increase in the long-term growth rate of free cash flowsalways cause an increase in the…

A: Free cash flows are cash flows that are generated within the company from its operating activities…

Q: The incremental operating cash flows of an investment may include the following: Group of answer…

A: Incremental cash flow is the additional operating cash flow that the company will incur or receive…

Q: How are incremental cash flows found in a replacement analysis?

A: The choice to substitute an existing asset with another is defined as the net current and internal…

Q: True or False Sales projections and the ability to accurately predict the future have a large…

A: The sales projections and ability to accurately predict the future helps management to estimate the…

Q: yback method, the Accounting Rate of Return, and Discounted Cash Flow Model (Ne

A: Step 1 A huge budget is a method through which a company assesses possible substantial projects or…

Q: Incremental cash flow is calculated as (cash flowB− cash flowA), where B represents the alternative…

A: Incremental cash flows are the cash flows that are left after meeting initial cash requirements as…

Q: Sales projections and the ability to accurately predict

A: Sales projection is a crucial procedure that a firm would execute on regular basis. It helps a firm…

Q: The net present value of an investment represents the difference between the: present value of cash…

A: To determine the value of NPV, NPV is the difference between the present values of future cash flows…

Q: Consider the calculation of an external rate of return (ERR). The positive cash flows in the cash…

A: External rate of return is the return rate which is expected to be generated from the project. If…

Q: g. The amount of money today that is consider equivalent to the cash flows expected to take place in…

A: Capital budgeting is the process of making decisions in long term assets. It is the process of…

Q: Describe and explain the significance of each of the following: payback period, internal rate of…

A: Payback Period: A project’s payback period is the number of periods required for the project’s cash…

Q: The rate of return that equates the present value of cash inflows and outflows is the: A. hurdle…

A: Introduction: Capital budgeting is an investment criterion or decision making mechanism for…

Q: te

A: Introduction : The given question relates to the capital budgeting techniques which are used to…

Q: For a project that has an initial cash outflow followed by cash inflows, the profitability index…

A: Profitability Index The Profitability Index (PI) is the ratio between the present value of cash…

Q: The ____ of an investment is the period of time for the ____ to equal the initial cash outlay.   a.…

A: The payback period refers to the amount of time it takes to recover the cost of an investment.…

Q: Define “incremental cash flow.”

A: An incremental cash flow is the additional operating cash flow that an organization receives from…

Q: The discounted payback method discounts cash flows at the opportunity cost of capital and then…

A: Cost of capital denotes that cost which a firm is required to pay to finance the amount for the…

Q: Illustrate the concept of present-worth analysis based on cash flowequivalence along with the…

A: The concept of present-worth analysis based on cash flow equivalence along with the payback period.…

Q: Define the cash conversion cycle (CCC) and explain why, holding other things constant, afirm’s…

A: Cash conversion cycle (CCC) is the cycle which converts the investments made into raw material and…

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.