answers to questions

What is the MOST important variable of the financial planning process? Select one: a. The costs b. The capacity of the fixed asset c. The pro forma income statement d. The sales forecast

What are the recommendation of an investment center manager if the company will use the method of return on investment?

Give an example of how a company can assess investment possibilities to make sure their choice reflects the company's requirements and financial management plan

Explain how you would evaluate the expected rate of return from the investment (purchasing a company) and the method to evaluate the investment decision. Assess the disadvantages and advantages of the investment method and why the method would provide the most accurate measure for the anticipated rate of return requirement. Justify your recommendation.

The best measure for evaluating the effectiveness of a manger in an investment center would be   A. residual income measures   B. current ratio measures   C. success in meeting budgeted revenues   D. success in controlling costs

"Capital budgeting is a critical process in financial management that involves evaluating and selecting long-term investments. Considering the methods used in capital budgeting, such as Net Present Value (NPV). Internal Rate of Return (IRR), and Payback Period, discuss the strengths and weaknesses of each method. How can financial managers integrate these methods to make informed investment decisions? Provide specific examples to support your discussion."

Provide an example of how the requirements of a company and its financial management plan can be considered when evaluating investment possibilities to ensure that choices are made.

Select all that is true about the role of financial managers and the types of financial decisions they make. a. Capital Budgeting function involves planning and determining the firm’s short term investments. b. Determining the appropriate level of inventory is a working capital management function. c. The duties of the financial manager includes determining the capital structure and which projects the firm should undertake. d. Capital structure describes the mix of short-term liabilities a firm uses to finance its short-term assets. e. The optimal financial management strategy of a financial manager is to reduce the overall risk level of the firm. f. Size and timing of cash flows is unimportant in a capital budgeting decision.

Which statement below best describes an investment center? a. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply. b. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply, and significant control over the amount of invested capital. c. The authority to make decisions over the most significant costs of operations, including the power to choose the sources of supply. d. The authority to provide specialized support to other units within the organization. e. The responsibility for developing markets for and selling of the output of the organization.

What is an investment center manager's advise if the firm intends to adopt the return on investment method?

Which of the following scenario shows the financial manager’s financing function? a. Prioritizing investments based on properly computed capital rationing method.   b. Capital budgeting computation and decision with regards to the planned acquisition.   c. Assessing and selecting a long-term and short-term financing tools that has a low cost.   d. Monitoring trends in operating expenses for the purpose of budget allocation.

Payback period, accounting rate of return, net present value, and internal rate of return are common methods to evaluate capital investment opportunities. Assume that your manager asks you to identify the measurement basis and unit that each method offers and to list the advantages and disadvantagesof each method. Present your response in memorandum format of less than one page.

Working capital management includes which one of the following? OA. Deciding which new projects to accept B. Deciding whether to purchase a new machine or fix a currently owned machine OC. Determining which customers will be granted credit OD. Determining how many new shares of stock should be issued OE. Establishing the target debt-equity ratio

Discuss the payback period, NPV (net present value), and IRR (internal rate of return) methods for capital budgeting analysis. What result does each method provide the user? What are the limitations of each of these methods? Which method would you find most useful in making the best investment decisions for your business and why?

Calculating return on Investment for an Investment center is defined by the following formula: Multiple Cholce Income/Average invested assets. Contribution margin/Average invested assets. Contribution margin/Ending assets. Net income/Ending assets. Gross profit/Ending assets.

Case Study: Identifying Errors in Capital Budgeting Decisions   Introduction:   Capital budgeting decisions play a crucial role in the financial success of a company, impacting its long-term viability. Managers strive to make accurate and informed decisions when evaluating potential investment projects. However, errors can occur, and it is essential to implement effective procedures to identify and rectify these mistakes. This case study explores various procedures and their efficacy in identifying errors in capital budgeting decisions.   Background:   Company XYZ, a manufacturing firm, recently implemented a capital budgeting decision involving a significant investment in upgrading its production facilities. The decision-making process was intricate, considering factors such as projected cash flows, discount rates, and risk assessments. Despite thorough analysis, the management recognizes the importance of post-evaluation procedures to identify potential errors and enhance…

Which one of these statements is correct? Accountants record sales and expenses after the related cash flows occur. The value of an investment depends on the size, timing, and risk of the investment's cash flows. Individuals tend to prefer later cash flows over current cash flows. When selecting one of two projects, managers should select the project with the higher total expected cash flow Most investors prefer greater risk over less risk.

The duration of time within which the investment made for the project will be recovered by the net returns of the project is known as а. Accounting rate of return method b. Payback period С. Net present value method d. Period of return Capital budgeting is the process of evaluating and selecting short-term investments that are consistent with the firm's goal of maximizing owners' wealth. Select one: True False

Explain and compare how return on investment and residual income are used to evaluate investment center performance

.  Qualitative considerations that may influence capital investment analysis include the investment proposal's impact on all of the following except ________. product quality manufacturing flexibility employee morale income taxes  The process by which management allocates funds among competing capital investment proposals is called ________. competitive analysis fund analysis capital rationing None of these choices are correct.  With capital rationing, alternative proposals are initially screened by establishing minimum standards and applying which of the following methods? Cash payback and net present value methods Net present value and internal rate of return methods Cash payback and average rate of return methods Net present value and average rate of return methods

How does an investment appraisal technique help companies move in the right direction regarding an investment decision?  What are some of the factors that the decision makers need to consider in making their final investment decision?

The environmental management plan considers the environmental and social impacts and: Group of answer choices how to account for these costs shows how the business will respond to market conditions how the business will develop its products or services identifies capital requirements and sources of capital

Which of the following is not a measure that management can use in evaluating and controlling investment center performance? a.residual income b.negotiated price c.income from operations d.rate of return on investment