If depreciation is not a cash flow item, why does it affect the level of cash flows from a project in any way?

Q: practice, would you expect the depreciation expense for a non-current asset to be overestimated or…

A: Depreciation is charged for non current asset being tangible asset, because of its wearing and tear…

Q: Relevant cash inflows and outflows in a discounted cash flow analysis are the differences in…

A: True

Q: Explain why depreciation and interest should not be included as costs in a discounted cash flow…

A: The company makes several investments and an evaluation of investment is necessary. Therefore, the…

Q: Can goodwill be amortized, and if so, how is it done?

A: Goodwill is an intangible asset since it reflects the surplus that a company pays to acquire another…

Q: From a financial perspective, how are projects chosen when capital rationing exists? Do you think…

A: In this question, we are required to determine how projects are chosen based on capital rationing…

Q: What does the short fall (below budgeted expense) in depreciation imply?

A: Depreciation connects the expense of utilizing a tangible item to the benefit obtained throughout…

Q: What are the Effects of Inflation on Projects with Depreciable Assets?

A: Answer: A depreciable asset is nothing a property that gives more economic benefit over a tax period…

Q: Depreciation does not involve movement of cash, therefore unnecessary in accounting for an entity’s…

A: Depreciation means allocation of the cost of the asset over the useful life of the asset. This is…

Q: How can an Investment be considered a liability since the company is forced to put resources into…

A: An investment can be considered a liability for a company when the company is forced to put…

Q: “Depreciation expenses have no effect on cash flows and, therefore, are not relevant in…

A: Depreciation expenses have no effect on cash flows and, therefore, are not relevant in…

Q: the Capital Asset Pricing M

A: Explanation : In simple words, Capital asset pricing model for valuing the cost of capital contains…

Q: Why would refinancing be an alternative to sale of the property?

A: Individuals always buy the properties taking the mortgage because payment for buying the property…

Q: True or False: Depreciation is the decline in the market value of tangible fixed assets.

A: Fixed assets are assets having a life of more than one year. Fixed assets like buildings, equipment,…

Q: what does it mean if the npv and irr are both negative quora, should the company invest in the…

A: Capital Budgeting entails long-term planning and monitoring of capital expenditures, as well as a…

Q: Which of the following is not a part of the impairment test of equipment under IFRS? Group of answer…

A: The objective of the question is to identify which of the given options is not a part of the…

Q: Which of the following is not a part of the impairment test of equipment under IFRS? Group of answer…

A: The objective of the question is to identify which of the given options is not a part of the…

Q: Why FASB treat the spending on the search and development as expense why it can’t be treated as long…

A: Accounting Principles: Accounting principles are the regulations and criteria that businesses must…

Q: Why must the Engineers consider the effective use of fixed capital assets?

A: Engineer indulge in numerous process of decision-making such as manufacturing, financing, and…

Q: 19. Which of the following is an appropriate cost approach for determining fair value a. Using…

A: Fair value is a key concept used to measure the value of assets, liabilities, and financial…

Q: What is meant by asset transformation and how is it the basis for differentiating between indirect…

A: Finance transformation can be defined as a business-wide combination of process, system, and culture…

Q: If the cash flows of one project are adversely impacted by the acceptance of another project, then…

A: Two projects are said to be mutually exclusive when the acceptance of cash flows from one of them…

Q: Why would companies choose one method of accounting for Depreciation over another method?  What are…

A: Most companies choose one method of accounting over another method on the basis of the accounting…

Q: Discuss, using practical example how revenue expenditure should not be capitalized?

A: SOLUTION- Thus, a revenue expenditure which increases the utility or productive capacity of an…

Q: Is it ever appropriate or acceptable to use the payback method of evaluating capital investment…

A: Introduction: Capital budgeting is an investment criterion or decision making mechanism for…

Q: Why might disinflation prove favorable to financial assets?

A: Disinflation is the reduction or lowering of the pace of inflation. In other words in situation of…

Q: What is the difference between independent projects and dependent projects? a: Independent…

A: There is a difference between dependent project , independent project and these and analysis help in…

Q: Assuming that there are no income taxes, which of the following is correct concerning depreciation?…

A: Depreciation is reduction in value of asset due to wear and tear of asset with the passage of time…

Q: Do the fixed assets lose their value even though they continue to function and contribute to the…

A: Meaning of Fixed Assets Fixed assets are those assets which are used in the business with the…

Q: Although depreciation is not a cash flow item, it plays an important role in the calculation of cash…

A: Cash flow (CF) is a measurement of how much money a company generates through regular business…

Q: Can depreciation be a profit management tool for the enterprise? Please explain with reason.

A: Definition: Depreciation:  Depreciation means fall in the value of an asset, its a process of…

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.