hich method of capital budgeting is best used for longer term capital investments? ⦁    Net Present Value ⦁    Internal Rate of Return ⦁    None of these methods ⦁    Both A & B

Q: (Without loss of generality assume that the expected/maximal exposures mentioned here correspond to…

A: Economic capital refers to the amount of money a company sets aside for covering any risks that it…

Q: Only one of the methods of evaluating capital investments discussed in Chapter 26 utilizes the…

A: The correct answer to the question is "b. Accounting Rate of Return".Accounting Rate of Return =…

Q: Which of the following statements regarding capital budgeting analysis is correct?     NPV assumes…

A: Capital budgeting is the process of making investment decisions by a company in which different…

Q: Select all of the following that managers can use to evaluate capital invesments. (Select all that…

A: Evaluation techniques of capital investment are performed to arrive at a decision of investment in…

Q: True or False: In solving a classical capital budgeting problem using binary linear programming…

A: The question is based on the concept of linear programming problem  in decision making for long term…

Q: Time value of money as realistic in O a. None of the options O b. Working Capital O c. Simple…

A: Time value of money shows that money today is worth more than the same money in future.

Q: 0. Capital Budgeting involves managing risks associated with long-term liabilities. T/F

A: The problem statement wants to identify the focus of the capital budgeting and the work done under…

Q: Does the PW method assume that the interest rate charged to any fundswithdrawn from a firm's…

A: The question is based on the concept of present worth calculation of any fund in investment…

Q: An investment with a cost of capital higher than its internal rate of return should be accepted.…

A: Internal rate of return is also known as IRR. It is a capital budgeting techniques which help in…

Q: On Capital Budgeting and Investment * Statement I: Accounting rate of return does not recognize the…

A: The questions are related to Capital Budgeting. The Accounting rate of return is traditional…

Q: Which of the following methods of methods of capital budgeting is base cashflows: Payback NPV…

A: As per Bartleby guidelines, If multiple questions are posted, only the first 1 question will be…

Q: . If a capital budgeting project’s cash flows are not normal, the internal rate of return (IRR)…

A: SOLUTION- INTERNAL RATE OF RETURN- IT IS A DISCOUNT RATE THAT MAKES THE NET PRESENT VALUE OF ALL…

Q: Which capital budgeting projects are ?preferred اخترأحد الخیارات a. Higher payback period O b. None…

A: Various decisions are required to be taken by the management before making any decisions related to…

Q: Describe the payback period approach to capital budgeting. Explain 1 advantage and 1 disadvantage of…

A: Pay back period is the length of time required to recover the cost of Investment. It is calculated…

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: How does the payback period approach capital budgeting? Examples of 1 advantage and 1 disadvantage?

A: Pay back period approch in capital budgeting is use to analysis two or more projects. The project…

Q: 9.Working capital is calculated as: Select one: Current assets plus current liabilities…

A: Introduction Working capital is an important measure of a business's financial health and liquidity.…

Q: When making a capital budgeting decision, which of the following are NOT relevant? The size of a…

A: A capital budgeting decision is a long-term decision involving the selection or rejection of a…

Q: “Only quantitative outcomes are relevant in capital budgeting analyses.” Do you agree? E xplain.

A: “Only quantitative outcomes are relevant in capital budgeting analyses”. This statement is…

Q: 15 Which of the following is incorrect for a borrowing project? A Its cash flow at time zero is…

A: Borrowing projects are the opposite of an investment project. In an investment project you make an…

Q: Payback method is Select one: a. None of the options b. Yield on investment c. PV of cash inflow- PV…

A: Payback method is one of the capital budgeting technique which helps in evaluating profitability of…

Q: A high capital gearing ratio indicates [A] under capitalization [B] over capitalization [C]…

A: Capital gearing Ratio is the term which means the amount of debt the company has relative to its…

Q: (a) What is a Capital Recovery Amount Factor?​​

A: Step 1 The ratio of a constant annuity to the present value of receiving that annuity for a certain…

Q: Q 2      a) Discuss the following terms…

A: Here, it is required to discuss the following terms:

Q: e financial manager's financing function?

A: First option is wrong because monitoring trends in operating expenses will help in determining the…

Q: Briefly discuss   NPV/IRR Purchasing Power Parity Cashflow issues Capital Asset Pricing Model…

A: Net Present Value (NPV) and Internal Rate of Return (IRR) are two important financial metrics used…

Q: The method of analyzing capital investment proposals that divides the average annual income by the…

A: This pertains to capital budgeting. In capital budgeting we appraise a project to determine whether…

Q: None

A: The Capital Asset Pricing Model (CAPM) is a fundamental theory in finance that seeks to explain the…

Q: Which of the following alternative assumes that accessibility of capital is infinite? a. Equivalent…

A: The equivalent uniform annual cost can be defined as a capital budgeting concept used to identify…

Q: The cost of capital used in capital budgeting should reflect the average cost of the various sources…

A: Cost of capital reflects long term funds like debt and equity yo acquire assets

Q: None

A: Option a: This option is  incorrect because time value of money is the expression of the value of…

Q: Most capital budgeting techniques involve analysis of net operating profits. True or False

A: Capital Budgeting is the process by which a business makes investment decision in long term assets.…

Q: Compare the moving VWAP and Moving Average in terms of their similarity and dissimilarity.

A: Volume weighted average price = price × volume ÷ total volume. It is analysis based tool helps to…

Q: Which of the following capital budgeting techniques recognizes noncash revenues and expenses? *…

A: Solution: "Accounting rate of return" recognizes noncash revenues and expenses. This is because…

Q: Describe Capital budgeting techniques with their respective strength and weakness for IRR , NPV , PI…

A: Capital budgeting is the process used by the companies to determine whether to invest in a long-term…

Q: Residual income is the excess of operating income over the cost of capitalassociated with the…

A: Residual income is the excess of operating income over the cost of capital associated with the…

Q: Net present value and the payback period are examples of discounted cash flow methods used in…

A: Various methods used in capital investment decisions are Pay back period, Accounting Rate of…

Q: I. If there is a positive NPV, IRR is higher than the cost of capital. II. If annual net cash…

A: Net present value is the difference between the present value of cash inflows and present value of…

Q: 13. Consider the following two statements: Statement 1: If nominal cash flows are used in…

A: Concept. according to fischer effect , (1+Nominal rate) = (1+ real rate) ( 1+ inflation rate). Thus…

Q: Identify which one of the following is not the importance of capital market? a. Effective…

A: Capital markets are very important for countries to grow business and mobilize money.

Q: 8- Which of the following methods of capital budgeting uses the average annual profits for…

A: In the given question we need to choose the correct option from the following given options.

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.