What is the incentive for managers to overstate a restructuring reserve in the current period in order to reverse it in future periods, since overstating the restructuring reserve decreases net income in the current period?

Q: What is capital rationing?

A:

Q: What is financial leverage? Why is a one-year measure of return on investment inadequate in…

A: Financial leverage: The benefit from use of financial leverage arises when the interest rate on the…

Q: Why are the net present value and the internal rate of return models superior to the payback period…

A: The net present value and internal rate of return techniques are superior to the payback method…

Q: risk implications of improving net profit margin to increase Return on Equity?

A: Net profit margin is the percentage of net profit to sales revenue

Q: do liquid assets frequently have lower rates of return than fixed assets?

A: Liquid assets are the cash or cash equivalents which can be drained out frequently whereas fixed…

Q: Can Retained Earnings grow too large? If so, what strategies might management take to reduce it

A: Answer: Retained earnings is the cumulative or collective profit hold by company in shareholders…

Q: The static GAP focuses on monitoring net interest income in the long term.   Select one: True…

A: The Static GAP focuses on monitoring net interest income in the short term but it can be calculated…

Q: What is capital rationing, what conditions lead toit, and how should it be dealt with?

A: Capital budgeting is a process in which capital projects are assessed in terms of their viability…

Q: If short - term rate - sensitivity asset - liability GAP is negative : a)Decrease in Interest Rate…

A: Several statements have been provided explaining the impact of net interest income in case short -…

Q: How do investors reduce investment risk by asset allocation and diversification?

A: Investment risk is a risk of potential financial loss built into the investment. For example:…

Q: What is the compensation for price risk in finance? How do they arise and what issues arise due to…

A: Price risk: Price risk can be defined as the risk that price of a security may reduce. This risk is…

Q: Which of the following would increase risk?   a. Raise the level of working capital b. Increase the…

A: The working capital is the funds it needs to carry out day-to-day operations like cash, accounts…

Q: How does a short-term cash flow crisis impact a firm's competitive strategy?

A: It is very important for any business to have cash in hand or at the bank for meeting day-to-day…

Q: Question: What does ROI stand for in finance? a) Return on Investment b) Risk of Inflation c)…

A: In this question, we are asked to determine the full form of ROI.

Q: A declining trend in the capital outlay ratio could be an indicator of deferred replacement of…

A: Capital Outlay Ratio:/The capital outlay ratio is a financial metric used to assess the efficiency…

Q: In general, what effect would a reduction in risk have on “going-in” cap rates? What would this…

A: Capitalization rate is the projected rate of return percentage that a property will make on the…

Q: What are the Factors That Complicate Capital Investment Analysis

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: What effect will disinflation following a highly inflationary period have on the reported income of…

A: Disinflation is the reduction or lowering of the pace of inflation. In other words, in situation of…

Q: Practice : a: The computation of return on average investment ignores one characteristic of the…

A: Capital budgeting refers to the technique of evaluating a project for investing in it. It has…

Q: advantages of negative interest rate policies?

A: There are pros and cons of negative interest rate policies. In fact, in my opinion negative interest…

Q: What is the difference between future value and present value? Which approach is generally preferred…

A: Present value and future value are considered while taking investment decisions. The future values…

Q: What are the implications of excess liquidity for the stability of the financial sector?

A: Financial system is defined as the range of the stability, when it used to dissipate the financial…

Q: How effective is the Yield Curve as a tool for assessing the coming of a recession?

A: A yield curve is a chart displaying the yields offered by government Treasury bonds for various…