If closing productive capacity is OMR 100,000, contribution is OMR 10,000, Indirect expenses are OMR 20,000, opening productive capacity is OMR 25,000 and direct expenses are OMR 5,000 then the profit under physical concept of capital maintenance is:
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- The formula to calculate EVA is Net operating profit - (invested capital × weighted average cost of capital). Contribution margin - (average capital assets × internal rate of return). Contribution margin – (invested capital × weighted average cost of capital). Net operating profit - (average capital assets × internal rate of return). O O O OResidual income is the excess of operating income over the cost of capital associated with the deployed assets. Following is information for four segments. Experiment with alternative rates of the cost of capital by using the pick list choices associated with the boxed area. Note how the relative residual income changes between the units based on the interest rate assumption! What do you wish to assume for the interest rate? >>>> Operating income Operating assets Assumed interest rate Cost of Capital Residual income Segment A 1,200,000 8,000,000 X 0 1,200,000 Segment B 1,000,000 4,000,000 X 0 1,000,000 Segment C 750,000 2,000,000 X 0 750,000 0% Segment D 500,000 600,000 X 0 500,000Two capital assets display the following: E(RA) = 12% σA = 1.5% E(RB) = 15% σB = 1.0% If asset A´s return is 5% below the Capital Market Line (CML), and asset B´s return is 1% below the CML, what is the equation of the CML? a) E(Ri) = 0.1203 − 0.02σi b) E(Ri) = 0.09 + 2σi c) E(Ri) = 0.1227 + 0.02σi d) E(Ri) = 0.15 − 2σi e) E(Ri) = 0.14 + 2σi
- Weighted average cost of capital is the combined cost of capital using a capital mix. The capital mix should be measured in terms of: Group of answer choices a. Market value of debt and equity b. Carrying value of debt and equity c. Carrying value of total assets d. Contribution margin ratioHow do you calculate net investment in working capital, net cash flows, present value of net cash flows, and NPV? WACC is 10.10%According to the profitability index criterion, a project is acceptable if its profitability index is greater than ____. a. 0 b. 1.1 c. or equal to 1 d. 1 plus the cost of capital
- 1) When converting accounting profits to cash flows, we broadly deal with depreciation and working capital as follows: Depreciation Working capital A) add add at the start of the project,deduct at the end. B) deduct add at the start of the project,deduct at the end. C) add deduct at the start of the project,add at the end. D) deduct deduct at the start of the project,add at the end.Weighted average cost of capital is the combined cost of capital using a capital mix. The capital mix should be measured in terms of: Group of answer choices Contribution margin ratio Market value of debt and equity Carrying value of total assets Carrying value of debt and equitySuppose the HomeNet's Cost of Capital is12%, use NPV, IRR, MIRR, PI, PP and DPPinvestment appraisal methods to analyse thisforecasted FCFs. Interpret your investment decisions madeaccording to the rules mentioned
- Can I please have the answers in these format : payback period = investement net annual inflow ARR = Average annual profit x 100 Average investment 1 can I have the answers in these type of formatWeighted average cost of capital is the combined cost of capital using a capital mix. The capital mix should be measured in terms of:What are the four types of cash flows MOST common in a capital budgeting valuation? Group of answer choices: A) Capital expenditure, net working capital, incremental free cash flows, after-tax salvage value B) Sales, cost of goods sold, interest expense and taxes C) Opportunity costs, externalities, synergies and sunk costs D) Net income, depreciation, flotation costs and dividends