Which of the following best explains the limitations of usin discount rate for evaluating projects?

Q: What text and supplemental information, is there a best choice for using any one specific method of…

A: Investment Valuation: Investment valuation refers to the techniques and procedures employed in…

Q: Summarizes the IRR computation for a mixed investment?

A: IRR for Mixed investmentBalances of project cash flow are both positive as well as negative. The…

Q: Explain why depreciation and interest should not be included as costs in a discounted cash flow…

A: The company makes several investments and an evaluation of investment is necessary. Therefore, the…

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: Describe the Project selection rules under the IRR criterion?

A: IRR (Internal rate of return) is one of capital budgeting techniques which is used to evaluate the…

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: The MARR used for a project’s acceptance or rejection is set relative to what cost?

A: MARR is a discount return which is the lowest rate of return that must be accepted in the project.

Q: e main hindrances in valuation estimates in busiiness valuation?

A: Introduction Knowing how much an asset is worth and what factors influence its value is critical for…

Q: Should the analyses show the sensitivity of the discounted net present value and other outcomes?

A: The question is based on the concept of a sensitivity analysis, used as a analysis tool in capital…

Q: What alternative approaches can be used to estimate variable consideration?

A: The alternative approaches that can be used to estimate variable consideration are: Expected value…

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: Comparison of NPV, IRR or Payback period

A: The net present value (NPV) is the difference between the present value of cash inflows and…

Q: What are the shortcomings of the payback period criterion? Which of these shortcomings are accounted…

A: Payback method is a manner of evaluating capital projects which computes the time taken by the cash…

Q: What are the advantages of using duration as opposed to interest-sensitive gap analysis?

A: Asset liability management is a technique used to address the risks that financial institutions face…

Q: Describe the methods of determining the Project Risk?

A: Project risk is an uncertain event or circumstance that affects at any rate one objective of a task,…

Q: What is a stand-alone principle and discuss the relevancy of financing cost under this principle.

A: In capital budgeting, the project evaluation and assessment is based on the criteria of project's…

Q: Which option is most profitable, keeping or replacing?Insert numerical value. What is one relevant…

A: The old machine is replaced with a new machine only when the production is improved and there is a…

Q: Explain Estimating Development Cost and Interest Carry?

A: INTRODUCTION Estimating development cost in project management is the process of forecasting the…

Q: Comparison of Financing Alternatives?

A: MEANING Alternative financing is a means of obtaining capital outside of the traditional banking…

Q: What is the potentially acceptable investment alternative?

A: An alternative investment is a financial asset that doesn't can be categorized as one of the…

Q: Which is the most accurate and commonly-used Investment Appraisal Method?

A: The profitability criteria of a project over the other can be considered by doing an analysis, that…

Q: Why sunk cost should not be considered when evaluating a project?

A: Sunk cost is a cost that has incurred , and which cannot be recovered.

Q: How can we illustrate Settlement Costs?

A: A cost is a monetary value that is incurred by the company to acquire something or to produce…

Q: How weak reserch culture have an affect on Low potential investment? Explain in detail.

A: The low potential investment is also known as the low-risk investment. It refers to the investment…

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: When performing benefit-cost analysis, economists usually discount future benefits and costs. Why?…

A: This is based on capital budgeting and concept of time value of money. Benefit-cost analysis is done…

Q: Under IFRS, how are investment properties subsequently measured? a) The cost…

A: International Accounting Standard 40 on Investment states that the investment property should be…

Q: What is the decision rule for payback?

A: Payback period is the period of time taken by the project to recover the investment in such project…

Q: How can we use the PW criterion to compare the alternatives to minimize expenditures?

A: The full form of PW is present worth. Present worth is known as the present value of the investment…

Q: Which is the most important breakeven in the analysis of a project?

A: Projects could be analyzed by using net present value (NPV) method. In this method, projects are…

Q: What is the conventional-payback method?

A: Conventional Payback Method

Q: What is the process of consideration of the payback period?

A: Payback period It computes the required time to recover back the project’s investment by way of…

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 the disadvantages of each criteria; payback period, discounted payback, NPV, IR

A: To determine the economic feasibility of capital investment, several capital budgeting analysis…

Q: How should changes in the estimated unguaranteedresidual value be handled by the lessor?

A:

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.