Does the IRR analysis yield the results consistent with PW and other equivalence methods?

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: In general terms, how does IFRS for SMEs differ from full IFRS?

A: International Financial Reporting Standards:   IFRS (International Financial Reporting Standards) is…

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: What are the differences between MIRR method and IRR method?

A: The question is related to MIRR and IRR.

Q: What are the four key assumptions examined in specification analysis in the case of simple…

A: Simple regression:

Q: What’s the primary difference between the MIRR and the regular IRR?

A: It refers to the rate of return that is computed by the company to make a decision of selection of a…

Q: In words, what is put-call parity?

A: Put-Call Parity It is a fundamental that shows the relation of option price i.e the European call…

Q: Explain why NPV is the best criterion and how it overcomes problems inherent in the other methods.

A: The "value derived from the use of money over time as a consequence of investment and reinvestment"…

Q: Compare IRR with MIRR method

A: Internal Rate of Return (IRR) is the rate at which the present value of expected cash inflows is…

Q: Describe in words how an NPV profile is constructed. How do you determine the intercepts for the x…

A: NPV profile means the graph which depicts the Net present value of the project at various discount…

Q: In a research, what is the difference between an experimental method and a correlational method?

A: Correlational research is a non-experimental research method which studies the relationship between…

Q: Which method is more efficient to obtain an equivalence?

A: Answer: The concept of equivalence tends to compare the cash flows in such a way that two…

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: How is the Equivalence Calculations performed with CompositeCash Flow Elements?

A: The question is based on the concept of the Equivalence Calculations performed with Composite Cash…

Q: Describe in words how an NPV profile is constructed. How are the intercepts of theX- and Y-axes…

A: NPV profile: NPV profile of an investment is a diagram of the net present value of the project…

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: What are the various levels of aggregation to which the LCNRV and LCM approaches can be applied?

A: LCNRV (Lower of Cost or Net Realizable Value) approach:   It is an approach that compares the cost…

Q: Under what conditions will the weighted average and FIFO methods give essentially the same results?

A: Under the FIFO (First in first out) method of inventory valuation, goods which are purchased first…

Q: Conduct Breusch-Godfrey test the hypothesis stated?

A:

Q: Which method is a more efficient way to obtain an equivalence?

A: Equivalence helps to equate the cash flows in such a manner that two cash flows occurring at…

Q: Which method would be more consistent with the matching principle? Why?

A: Definition:

Q: IRR analysis is based on the

A: IRR (internal rate of return) is one of the capital budgeting techniques that is used in order to…

Q: Compare and contrast probable and estimable contingencies versus remote contingencies.

A: The question is related to the probable and estimable contingencies and remote contingencies.

Q: What is a sensitivity analysis, and how does it work? Can you provide an illustration of this?

A: Here is the Answer

Q: Describe techniques of comparative analysis.

A: Comparative analysis of a financial statement helps the potential investors and stakeholders to…

Q: How can we use the AE Method to Compare Mutually Exclusive Alternatives?

A: The AE method is used to compare mutually exclusive alternative as explained below,

Q: Which of the following are substantive tests?

A: For identifying whether the following are substantive tests or not we need to first identify what is…

Q: Give an example of a Sensitivity Analysis performed for Mutually Exclusive Alternatives?

A: Mutually exclusive alternatives are those alternatives out of which only one can be selected at a…

Q: If you wanted to evaluate a firm’s DSO, with what could you compare it?

A: DSO is the number of days that firms take to convert their account receivables into cash.

Q: Explain the relationship between the conventionaL PW criterion and the B/C ratio?

A: The relationship between the cost of the project and benefits earned from the project is measured by…

Q: Explain the process of Equivalence Calculations with Continuous Compounding?

A: Equivalence calculation is that calculation which gives the fix return surety in future in any…

Q: Do equivalence calculations require a common time basis for comparison?

A: Answer: The calculation of equivalence method is used where duration of the projects is not equal.…

Q: What are intracompany comparisons? What are intercompany comparisons? How do they differ?

A: The examination of two or more procedures, papers, benchmark datasets, or other items is referred to…

Q: Does the Equivalence Calculations require a common time basis for comparison?

A: Equivalence approach for calculation is used when lives of the projects are not equal. When the…

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: Does the Equivalence Calculations require a common lime basis for comparison?

A: Answer: The calculation of equivalence method is used where duration of the projects is not equal.…

Q: How can we compute the true IRR, or RIC, as a function of the MARR?

A: Minimum Acceptable rate of return is the minimum rate which the management wishes to have from any…

Q: Using the basic formulas, how can we extend the concept of equivalence to determine interest?

A: Equivalence in terms of financial management refers to the gap between future consumption and…

Q: Explain Variation on the Preferred IRR and IRR Lookback?

A: The internal rate of return (IRR) is the measure used in the financial analysis of an investment…

Q: What is the difference between FMS - CMS?

A: The differences between dedicated flexible manufacturing system and random-order flexible…

Q: Explain direct-effect noncompliance.

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