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is difficult to compute
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Deals with accounting income rather than cash flows
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Fails to consider cash flows beyond the payback period
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- Which of the following statements about accruals is true? Select one: A. All accrual accounting adjustments are value irrelevant B. Accrual income is less relevant than cash flow C. Accruals cannot be manipulated D. Accruals are less reliable than cash flowsTo find NPV, it requires Choices: A.none of the choices B.discount rate and estimated cash flows C.investment amount plus discount rate D.discount rate and inflation rate E.estimated cash flow and capital structureThe amount of revenue that is foregone from an alternative use of cash is called a.sunk cost b.differential revenue c.opportunity cost d.differential profit
- Which of the following should NOT be taken into account in calculating free cash flow? Select one: a. Operating income b. Interest expense c. Net working capital d. DepreciationAccruals occur when the cash flow precedes either revenue or expense recognition. True/False?One of the shortcoming of the payback method is that it ignores cash flows after the payback period. True False
- What are the disadvantages of only accounting for cash income and expenses in basic cost and return analysis?Modified cash basis or hybrid basis differs from accrual basis in the computation of Gross profit O Expenses Depreciation Bad debts expense please provide an explanationWhich of the following is NOT a reason why cash flow may not equal net income? O a. Capital expenditures are not recorded on the income statement. O b. Changes in inventory will change cash flows but not income. O c. Amortization is added in when calculating net income. O d. Depreciation is deducted when calculating net income.
- research articles that deal with the benefits which might be derived from the Statement of Cash Flows. How might it be manipulated (although it is far more difficult to manipulate than the income statement or the balance sheet)? What are the differences between the Direct Method and the Indirect Method for preparing the Statement of Cash Flows? Which method is preferential and which is most common?Discuss why the Free Cash Flow can not be calculated directly by taking the numbers from Cash Flow StatementWhich statement is incorrect? Under cash basis of accounting, * A. the matching principle is ignored.B. if cash is collected, revenue is recorded regardless of earning process.C. revenue is recognized when the receivable is initially recordedD. the projection of the timing and amounts of future cash flows is less accurate than under accrual accounting.E. none of the above