how present value is useful in economic decision making

Q: Calculate the turning point of economic efficiency!

A: Efficiency is calculated when output is divided by input and multiplied by 100. Input = revenue = 18…

Q: What is the meaning of economic value added (EVA)? What does it measure? Why is it important?

A: Economic value added ("EVA") measures a company's financial performance based on the excess wealth…

Q: Present and Explain the theories of the Yield Curve?

A: The yield curve is a curve that shows the relationship between the interest rates and the different…

Q: Explain present value, future value, and opportunity cost.  Give an example of each concept.

A: Present value:It is the value at which the current sum of money in difference to some future value…

Q: What are some possible financial decisions in which using the Present Value (PV) formula might be…

A: The present value (PV) is the current value provided a defined rate of return of a future amount of…

Q: What is the total investment approach?

A: Total Investment Approach: In the Total Investment Approach, there is a risk-return tradeoff in the…

Q: What are economic resources?

A: Economic resources: Assets or services of an organization carrying some economic value which can be…

Q: Discuss cost-benefit analysis and financial analysis tools

A: Answer: Cost-benefit analysis: It is nothing but a process of decision making that balances the…

Q: Explain how useful the price mechanism is in tackling the basic economic problem?

A: the main role of price mechanism in basic economic problem is allocate scare resources in market…

Q: What is the relationship between present value and future value?

A: Future Value : FV is that value which will be received in near future. Present Value : PV is that…

Q: What is Market Value Added (MVA)?

A: The market value added is the difference of the current value of the company and the equity capital…

Q: What are the uses and limitations of economic data?

A: In this question, we need to explain the Economic data.   Economic data: The economic data indicates…

Q: Explain Present Value?

A: Present value is the current value of a future sum of money or value. Present value is useful to get…

Q: How behavorial bias affect investment behavior?

A: Behavioral bias is the belief by the investors that unknowingly affects the investors investment…

Q: What methods could be used in profit planning?

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What are the benefits of Profitability Analysis?

A: Profitability analysis is a tool used by the firm to analyze cost and revenue to know whether the…

Q: What do you think is the importance of Economic Development in relation to the field of study…

A: Accounting plays an essential role in the economic development. high quality…

Q: present worth analysis, whic

A: Introduction: Present worth analysis is defined as analysis in which the cash flows of the project…

Q: Economic Institutions Inclusive.

A: Given as,

Q: What is an opportunity cost and why should it be included when making decisions?

A: Opportunity costs is the costs of next best alternative foregone by accepting current alternative.…

Q: wHAT IS PRESENT VALUE?

A: Present value also known as PV is the value of a future sum of money discounted at specified rate of…

Q: What does the usage of technical analysis mean for the theory of market efficiency?

A: Market efficiency:- Market is said to be ‘efficient’ only if the price of every security in the…

Q: Explain the term Value investing strategies?

A: SOLUTION:-   Benjamin Graham, an American economist, investor, and professor, pioneered a new method…

Q: Why is the contribution margin an important concept forincremental decision making?

A:

Q: With example, explain the difference between induced and indirect economic impact.

A: Answer:- Economic impact definition:- An economic impact study investigates the effects of a certain…

Q: What is market efficiency?

A: Market Efficiency term is taken from a paper written by Eugena Fama in 18970. Fama acknowledges that…

Q: What are economic agents?

A: Examples of economic Agents: Departmental heads, production manager (internal agents), and supplier…

Q: what is Political cost hypothesis ?

A: The financial statement will be prepared by the company to know the financial position of the…

Q: What is the meaning of Resource Market?

A: In business terms, anything which acts as input and contributes to the production process refers to…

Q: Which is the single most important criterion for investment decisions?

A: NPV computes the existing value of future benefits by discounting future cash flows with a given…

Q: Define solvency and profitability. How are they alike?

A: Answer: Solvency is status of company when the asset is higher than liabilities. Profitability  is…

Q: Define Market-oriented investors

A: Putting amount in a scheme to earn return is known as investment. Before making an investment,…

Q: Explain advantages of Centralization and advantages of De-Centralization in terms of economic…

A: Centralization is the process of making all the relevant decisions from the central authority. The…

Q: Discuss the advantages and disadvantages of the Net present value

A: Net present value is the method of capital budgeting that helps in determining the present value of…

Q: Does the Profitability Analysis play an important role in decision making? How?

A: Yes, Profitability analysis helps the decision-maker in making decisions as it helps in the…

Q: What is Economic Value Added ?

A: Economic value added is used for measuring the financial performance of a company based on the…

Q: In what way do free resources becomes economic resources?

A: Economic resources are indeed the tools used to carry out economic transactions. Inputs into the…

Q: what is earning forecasting?

A: The act or process of using certain data to predict future earnings of a publicly-traded company.…

Q: What is net present value? How does net preset value work?

A: Net present value:- Net present value is the investment evaluation technique, where we evaluate…