Multiple Choice Are revenues. Increase income. Are liabilities. Are not allowed under GAAP. Require an outlay of cash in the future.

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

A: True

Q: eates additional expense without enough benefit through codt savings, income or capital gain, them…

A: Companies use debt in the capital structure because interest on debt is tax deductible and reduces…

Q: If debt creates additional expense without enough benefit through cost savings, income or capital…

A: We know that Debt is the cheaper source of finance, because in income tax interest on debts is…

Q: Investors will pay a premium to invest in risky assets. OA. True OB. False

A: Risk premium is the extra return  that an investor receives for investing in risky assets.

Q: ternal rate of return (IRR) and net presetn value (NPV):  -Generally arrive at the same…

A: Net present value is basic technique used in capital budgeting as it considers the time value of…

Q: Sophisticated capital budgeting techniques do not A. examine the size of the initial outlay. B.…

A: Capital budgeting techniques are used to understand the feasibility/acceptability of long term…

Q: Depreciation is a non-cash charge, it doesn’t affect the results of cash budget analysis.  True…

A: Depreciation is charged as reduction or decrease in value of fixed assets over the period of time.…

Q: Bad debts under the allowance method are A reserve created to meet expected next period expense. An…

A: To accurately answer the question about bad debts under the allowance method, we need to understand…

Q: The accrual accounting rate-of-return method has a significant weakness for use in making capital…

A: The accrual accounting rate of return refers to the percentage of return that is ecpected form the…

Q: Assuming that we are not able to accurately predict cash flows , generally decreased risk is thought…

A: Cash flow at risk at risk tells us how changes in market factors can change the future cash flows.…

Q: The primary financial market does not ensure the collection of saved income from holders of…

A: Fresh stocks and bonds are issued to the public for the first time on the primary market. Investors…

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: A company that earns a higher return with borrowed funds than it pays in interest on those funds is…

A: Financial leverage is the strategic use of borrowed funds to augment the return on investment. In…

Q: If investment exceeds private savings, then the current account:   a. must be negative. b. must be…

A: We know that CA  = S - I here CA = current account; S = national savings and I = investments

Q: One problem with free cash flow method is gives too much weight to countinung value. Do you agree

A: Answer :- YES

Q: Statement 1: Payback Method does not incorporate the time value of money. Statement 2: Payback…

A: Payback period is referred to as an amount of the time for recovering the cost of an investment.…

Q: Why can an M&A fail? O a. Economies of scale O b. shortcomings of the due diligence process,…

A: In general terms merger and acquisition refers to the consolidation of assets of 2 or more entities.…

Q: How would the transactions be reconciled if the allowance for bad debt is converted to a bad debt…

A: This question said that The company made the provision or provided for allowance for bad debt as per…

Q: Liquidity

A: A firm’s liquidity position plays a very important role in ensuring its survival in the market.

Q: Since idle cash does not make money, a manager may choose to invest this extra cash in temporary…

A: Investment in temporary investments means investing in short term highly liquid investments.These…

Q: Which statement is true? * General borrowings may earn investment income deductible against general…

A: Business may borrow funds for the purpose of business. These borrowings can be general borrowings or…

Q: Ignoring differences in the useful lives of investments when evaluating ca

A: Capital expenditures are distinct from operating expenditures, which are day-to-day spending…

Q: 1. Explain how capital reduces banking risks. Discuss the importance of cash flows and economic…

A: Capital reduces banking risks:  It reduces banking risk by protecting against insolvency. It is used…

Q: The payback period method has been criticized for not taking the time value of money into account.…

A: Payback period method:Payback period: This is the most widely used traditional methods of evaluating…

Q: Credit risk is defined as the inability of _________to meet their debt obligations. For _______the…

A: risk management is a task that requires a huge amount of skill and development. for risk management,…

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: Decreases in economic benefits in the form of outflows or depletions of assets or incurrences of…

A: Lets understand the basics.Lets understand the basics.Elements of Financial Statements:The…

Q: Short run vs. Long Run a.Why on the long run, fiscal and monetary policies are not effective?

A: Short Run: This refers to the factor of production where capital is fixed. The time period in such a…

Q: 26. Real interest rate and real cash flows do not include A. equity effects B. debt effects C.…

A: Interest rate refers to the rate at which one party agrees to lend and the other party agrees to…

Q: How can a Company Show Positive Net Income but go Bankrupt? What does Working Capital Mean? Why do…

A: Kindly find the answers to you question below :

Q: a. Wealth Maximization is vague b. Wealth Maximization is a modern approach c. Wealth Maximization…

A: The usual assumption in financial management for the privet sector is that the primary financial…

Q: echnical problems associated with the internal rate of return include:

A: IRR (Internal Rate of Return): It is the rate of return that makes the net present value of the…

Q: When Balance Sheets are being prepared, Assets and Liabilities are recorded at the current values,…

A: The correct answer for the above mentioned questions in the following steps for your reference.

Q: When adjusting for inflation, there are two methods. The real- rate method where the discount rate…

A: The real rate method involves adjusting the discount rate or interest rate to account for inflation.…

Q: the event of difficulty in recovering the funds advanced, claim the monies back from the borrower,…

A: A loan is an instrument which is used to raise money. So a borrower can raise money at a defined…

Q: Which of the following statements is not correct? Group of answer choices A)Purchasing fixed assets…

A: A)Purchasing fixed assets using cash decreases the current ratio. Purchasing fixed asset using cash…

Q: The payback period method has been criticized for not taking the time value of money into account.…

A: Discussion on payback period method:Payback period: It represents the period required to recover the…

Q: Please solve

A: The objective of the question is to identify the correct description of bad debts under the…

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.