. How does one determine the value of any assetwhose value is based on expected future cash flows?

Q: How do you calculate Fixed Asset Turnover? What is the Free Cash Flow Ratio? What is the difference…

A: The answers for the questions on accounting ratios are discussed hereunder : Fixed Assets turn over…

Q: Identify the cash flow series associated with production or service over thelife of the asset?

A: Definition: Cash inflows: The amount of cash received by a company from the operating, investing,…

Q: True or False In the net present value method, market research costs incurred in the past should be…

A: An investment appraisal depicts a financial analysis of a capital project that requires a huge…

Q: The internal rate of return (IRR) is The same thing as the cost of capital. The discount rate that…

A: IRR is the internal rate of return. It is the rate at which net present value is equal to zero.…

Q: How is the value of an asset determined by predicted future cash flows?

A: The Answer

Q: Under IFRS, value-in-use is defined as: a.   net realizable value. b.   fair value. c.   future cash…

A: IFRS International financial reporting standards are guidance and framework provided for reporting…

Q: Which of the following statements is true for historical cost valuations? (Select one or more)…

A: According to accounting principles, a historical cost is a method of valuing assets in which the…

Q: How do you evaluate an asset whose value is predicated on future cash flows?

A: Assets are the resources that are generally used for the purpose of revenue generation by the…

Q: What is the present value of the combined cash flows?

A: Present Value: It represents the present value of the future cash flow stream.  It is computed by…

Q: Finding the present value of future cash flows is called O A. analytics, tracking and finding the…

A: Capital Budgeting: It is a process a company undertakes for the evaluation of potential investments…

Q: Which of the following terms accurately describe what a resource is worth in its next- best use. a.…

A: In this question the factor which describes the best worth of resources is asked. We will analyse…

Q: using the free cash flow valuation model show the only avenues by which capital structure can affect…

A: While utilizing the model of free cash flow valuation there’re many values that might be considered.…

Q: What three aspects of cash flows affect the valueof any investment?

A: The cash generated over and above required by business operations and capital expenditure is called…

Q: cash flows versus net income.Which should we use in present value calculations and why?

A: Definition: NPV is the difference between present value of cash flow and present value of cash…

Q: How is working capital handled in the calculation of cash flows from a capital investment? Is it…

A: Working capital or net working capital is equals to firm’s current assets minus current liabilities,…

Q: Describe the annual cash flow analysis, which presents measures of investment worth based on yield?

A: The question is based on the concept of cash flow and its analysis in terms of discounted value of…

Q: Why is it true that a reinvestment rate is implicitly assumed whenever we find thepresent value of a…

A: Discounting is the method of assessing the real value of a potential transaction or collection of…

Q: How do you evaluate an asset whose value is dependent on future cash flow expectations

A: The Answer :

Q: What is the significance of the FCF (Free Cash Flow) in the area of valuation?

A: Cash flows refer to the cash expenditure and cash receipt of the business over a specific time…

Q: statements are true of long-term investments? They can be considered cash equivalents.

A: Investment: It refers to the process of using the currently held excess cash to earn profitable…

Q: On what does the interest paid on a cash investment depend?

A: Cash investment An investment (short-term) under which one makes a deposit the cash and also…

Q: Briefly discuss why you might choose each of the following analysis techniques when considering an…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: How can we estimate the profits (more precisely, the cash nows) that the assets will generate during…

A: It is a process of acquiring an approximation or projection or forecast of a firm’s future budgetary…

Q: An investment property is considered to generate cash flows that are?

A: Investment property can be defined as the property consisting of land or building which is not…

Q: How are incremental cash flows found in a replacement analysis?

A: The choice to substitute an existing asset with another is defined as the net current and internal…

Q: Define the positive cash flows?

A: The positive cash flow is the state of the organization wherein money inflows to an enterprise over…

Q: Will the carrying value of a long-term asset be equivalent to its market value under typical…

A: Here is the Answer

Q: How can the Cash flow be considered to evaluate the economic meritof any investment project?

A: Investment projects are usually capital expenditure that includes different cash flows. Capital…

Q: When an asset or liability is initially recorded, what determines its amount? The Replacement cost…

A: When an asset or liability is initially recorded, it is recorded at its cost of acquisition.

Q: Which of the following are Cash Outflows from Investing?

A: The cash flow statement shows the cash inflow and cash outflow from the operating activities,…

Q: How is valuation of any financial asset related to future cash flows?

A: Valuation of a financial asset=Present value of expected future cash flows

Q: What are the best startegy for flactuating cash flow?

A: The movement of funds into or out of a business is referred to as cash flow.Inflows are represented…

Q: Value in use is a) © Discount rate b) © Present value of future cash if flows c) © Uncertainty of…

A: The monetary value of an asset or liability is referred to as its value. The most accurate…

Q: What should a firm’s goal be regarding the cash conversion cycle?  Explain

A: The cash conversion cycle measures the number of days between the company making a deposit to buy…

Q: Describe the Probabilistic Cash Flow Analysis?

A: Answer: Cash flow applies to the overall sum of cash and cash equivalents that come into and out of…

Q: Discuss the two variables that must be considered whether you are using the present value of cash…

A: The discounted cash flow approach and the relative valuation approach are both used to value any…

Q: What is the relationship between the predictability fo a firm's cash inflows and its required level…

A: Working capital, otherwise called net working capital (NWC), is the distinction between an…

Q: The basic principle of valuation states that the value of any asset is: O The sum of the present…

A: The present value of an asset is the sum of all future cash flows discounted at the discount rate.

Q: Does the value of any asset depends on the cash flows producedby the asset? Why?

A: Asset valuation involves the determination, using book values, of a fair market, or the present…

Q: Explain how the cash flows are structured in order to estimate thenet advantage to leasing

A: Net advantage to leasing (NAL) refers to the overall financial savings that might probably result…

Q: Illustrate the concept of present-worth analysis based on cash flowequivalence along with the…

A: The concept of present-worth analysis based on cash flow equivalence along with the payback period.…

Q: How is the value of any asset whose value is based on expected future cash flows determined?

A: Answer: When there is a sequence of expected future cash flows, cash flow method is one of the best…