A critical assumption of the exploratory factor analysis (EFA) is that it is only appropriate for sets of non-nominal items which theoretically belong to reflective latent factors. Why is it so explain briefly? coursehero

Q: How to compare and contrast probable and estimable contingencies vs. remote contingencies.

A: Contingencies: Contingencies are the incidences   which may  or may not happen  and it depend  on…

Q: Outline the weaknesses of sensitivity analysis

A: Sensitivity analysis uses in capital budgeting for measuring the risk in project. It helps in…

Q: Explain how materiality differs for failure to follow GAAP and for lack of independence.

A: Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the…

Q: What have been the results of empirical tests of the dividendtheories?

A: Answer: Constructing a perfect empirical test of the relation between pay-out strategy and the…

Q: For information to be relevant, it has to possess: Only predictive value Both predictive and…

A: Relevance is a Fundamental characteristic of useful Financial information. Relevant information can…

Q: Why the limitation of portfilio analysis is itsuggests the use of standard strategies that can miss…

A: A portfolio is a collection of various investments. Portfolios are a vital part of a corporation…

Q: Describe the method for conducting sensitivity analysis for mutually exclusive alternatives?

A: Sensitivity analysis is a financial model that decides how target factors are influenced by changes…

Q: What assumptions and limitations does multiples valuation have?

A: Multiple valuation or relative valuation is a market based valuation method where the target company…

Q: Explain Deficiency Judgment?

A: To borrow funds, borrower might be required to mortgage its property to the lender. In case that…

Q: Which one is not an advantage of the sensitivity analysis? A. To make contingency plans B. To adjust…

A: Some important factors are changeable and unpredictable in future like interest rates, cashflows,…

Q: uncertainty?

A: Answer - Option D Relevance is where the information is useful and appropriate , predictive or…

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: Describe the Sensitivity Analysis method performed for Mutually Exclusive Alternatives?

A: Sensitivity analysis is a financial model that decides how target factors are influenced by changes…

Q: Briefly explain the assumptions of CAPM

A: Capital Asset Pricing Model (CAPM) is a measure used for determining the price of risky assets.…

Q: An analysis of what happens to the estimate of net present value when only one input variable is…

A: Net Present Value: It is the present worth of future cash flows and the initial cost of the project.…

Q: A principle that is concerned with information that should be significant enough to affect…

A: Accounting Principles: These are the methods, guidelines, and rules that shall be followed by the…

Q: Which of the following aspects of a cost-benefit study would have the greatest uncertainty as to its…

A: Cost - benefit analysis is a decision making process in which costs incurred and revenues earned due…

Q: which of the following is not a qualitative characteristic associated with Relevance? a.…

A: Financial statements should be true and fair, for presenting true and fair financial information;…

Q: Internal rate of return approach does not address the issues of scale! Discuss?

A: Capital budgeting is a method used for finding the profitability of investment proposals. These…

Q: why to conduct feasivility study

A: Forecasting by financial analysts assists management in determining appropriate ways to attain the…

Q: It could be said that strategy invalidates the net present value rule Explain the reasoning behind…

A: The net present value rule is an investment concept stating that projects should only be engaged in…

Q: “Total input includes abnormal as well as normal spoilage and is, therefore, inappropriate as a…

A: Inventory shrinkage: It represents the loss of inventory. In other words, it refers to the…

Q: An inaccurate estimate of asset needs can have serious consequences. Explain how?

A: Estimates of assets:  Estimate of assets is the estimated worth of assets of original worth of…

Q: Which one is not an example of input to a mathematical model?  a. Uncontrollable or environmental…

A: Solution: Project result is not an example of input to a mathematical model because it is an example…

Q: Does the MM theory appear to be correct according to either empirical research or observations…

A: The question is based on the concept of Modigliani Miller (MM) approach of capital structure and…

Q: oncepts of “Relevance” and “Representational Faithfulness”

A: SOLUTION:- Relevance means the potential of information or facts to make a distinction in decision.…

Q: What is the underlying cause of ranking conflictsbetween NPV and IRR?

A: Net Present Value considers the time value of money that discounts the future cash flows to the…

Q: Which of the following is not considered to be an analytical procedure?

A: Answer: Comparisons of financial statements accounts with source documents

Q: Explain about the PROSPECTIVE APPROACH: WHEN RETROSPECTIVE APPLICATION IS IMPRACTICABLE.

A: Accounting policies are required to be followed consistently so that, comparability of the financial…

Q: What serious consequences occur in an inaccurate estimate of asset needs?

A: Estimates of assets:   It is approximate value of assets of original value of assets which is used…

Q: Which qualitative characteristic is an ingredient of relevance? a. Verifiability b. Timeliness c.…

A: As per general accounting principal, financial statements of an entity should be true and fair. In…

Q: Only sets of non-nominal items that presumably belong to reflective latent factors are acceptable…

A: Definition: Analysis of Factors (EFA): An experiment's variables are analyzed using statistical…

Q: Thich of the following is FALSE regarding various methods of project analysis?

A: The following methods reflect the time value of money: Net Present Value Internal Rate of Return…

Q: The inputs to a model may have different roles. Among the choices, which should be excluded?…

A: Inputs are main variables for decision making in any model. Inputs influence the output amd the…

Q: Why is it more accurate to describe the subject matter of this chapter as CVP analysis rather than…

A: Cost-Volume-Profit Analysis (CVP Analysis): CVP Analysis is a tool of cost accounting that measures…

Q: describe presentation choices, including non-GAAP measures, that could be used to infl uence an…

A: There is very nothing new during this reading, simply a review of the previous material. heaps of…

Q: “Units of abnormal spoilage are inferred rather than identified.”Explain.

A: Spoilage:Spoilage is the defective item at intermediate or final stage. The spoilage goods cannot be…

Q: Which of the following is NOT an advantage of using sensitivity analysis?

A: Which of the following is NOT an advantage of using sensitivity analysis? A  It identifies the…

Q: Explain direct-effect noncompliance.

A: Direct-effect noncompliance: Direct-effect noncompliance produces direct and material effects on…

Risk Management Techniques

Risk management is the procedure of recognizing, analyzing, monitoring, and preventing the risks and threatening factors of investments and business. Risks can arise from various factors including internal controls, market changes, natural disasters, and failure in productions. Risk management techniques enable entities to control and minimize the risks as well as the threatening factors of the business and it also helps to improve the business.