Assuming no changes in other variables, which of the following would decrease ROA? B . A decrease in interest expense.

Q: As the number of compounding periods increases on a fixed investment, the amount of money in the…

A: The compounding period is the time period between, when the interest compounded last time and when…

Q: How must one discount a series of uneven receipts to find present value (PV)?

A: The cash payment or cash receipt of each period should be discounted individually and then add all…

Q: Which of the following is not an advantage of the average rate of return method? a.includes the…

A: Average rate of return is a method of calculating return on the asset

Q: Is the Compounding Period equal to Payment Period? When does this situation arise?

A: Compounding period is period by which the interest is paid or added to the principal. Payment period…

Q: Increasing interest expense will have what effect on EBIT?

A: EBIT stands for Earnings before Interest and Tax, the amount earned by the company from the…

Q: what is the effect of making changes to net present value calculations

A: Net Present Value = Present value of future cashflows - Initial Investment

Q: How does an “opportunity cost”,  subtracting from the revenue of an alternate course of action,…

A: Opportunity cost: Opportunity cost is a loss of income from one alternative if another alternative…

Q: Can we compute the IRR for each option without knowing the revenue figure? Why?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: What is the most likely impact on return on equity of an increase in operating expense margin, all…

A: Operating expenses are required to run the business. AN increase in operating expenses reduces the…

Q: in discretionary fiscal policy (e.g., taxes) and automatic stabilizer ployment insurance benefits)…

A: Government changes the policy to bring desired impact on the economy.

Q: The static GAP focuses on monitoring net interest income in the long term.   Select one: True…

A: The Static GAP focuses on monitoring net interest income in the short term but it can be calculated…

Q: The potential percent gain or loss in changes of variable is taken into account by: A present worth…

A: Percent increase or decrease is such a measure of of change of percent which to extent measures…

Q: Which of the following statements is true about the present value factors? The present value factor…

A: Present value interest factor is used to determine the present value of series of future annuities.…

Q: Give at least two reasons for choosing the net present value method and at least two reasons each…

A: Below are the reasons for choosing the net present value method: Time value of money: The net…

Q: is the difference between the gross present value of the benefits of that action and the amount of…

A: Net present value is the difference between the present value of future cash inflows and cash…

Q: Requlred: Calculate the increase or decrease in the operating income in both alternatives.

A: Incremental Analysis: Incremental analysis refers to the analysis of differential revenue that could…

Q: Each of the following are true of relevant information except O different alternatives can be…

A: Accounting is the process of recording, classifying, summarising and reporting accounting…

Q: True or false Amortization is the spreading out of a cost over a period of time  ?

A: Cost refers to the amount incurred by the entity over a particular item of expense, asset or…

Q: We can use double decline to calculate amortization Select one: O True O False

A: The amortization is said to be equal to depreciation and it is charged on intangible assets.

Q: The difference between the expected return and the actual return is referred to as the unexpected…

A: The excess amount over invested value that an investor estimates to realize over horizon of…

Q: Which of the following is not a variable in the basic present value equation? Multiple Choice…

A: Investors are holding securities for the purpose of gaining the returns. The return is calculated…

Q: O Payback does not consider the time value of money

A: Capital projects refer to a project which is helpful in maintaining and improving the asset of the…

Q: appropriate option (i) The rate of return method does not take care of timings of returns. (ii)…

A: Investment appraisal techniques are used to identify whether to invest or not in the project.   Rate…

Q: In a margin account, the interests should be higher than the returns. TRUE OR FALSE?

A: In a margin account, the investor borrows from the broker. So, it is not necessary that the interest…

Q: A higher interest rate results to a. increased amount of present value. b. decreased amount of…

A: The current availability to future availability is preferred. It represents that lower interest rate…

Q: Which of the following transactions will not result in an increase in revenues?

A: In finance revenue increases when a sale takes place or when a transaction adds to the top line/…

Q: Does Compounding Occur at a Different Rate than that at which payments are made? How?

A: Answer: The answer is no, because the compounding takes place at the same rate as that at which…

Q: The average duration of its assets is longer than that of its liabilities.   There is a…

A: Risk is the uncertainty associated with an investment. Higher the risk more is the return and lower…

Q: Why Pay back period method is not as effective as NPV?

A: Payback method  It doesn't consider account inflation as well as the cost of capital. It ignores…

Q: How would an increase in the interest rate or a decrease in the number of periods until the payment…

A: Interest rate is defined as an amount of an interest due per period as the proportion of amount,…

Q: Which of the following investment appraisal techniques does not involve discounting? a. NPV b.…

A: Investment appraisal techniques are NPV, IRR, ARR, Payback period, discounted payback period,…

Q: What is the opposite of a vacancy rate? A O Internal rate of return. BO Occupancy rate. CO…

A: The vacancy rate is a percentage measure for all the available rental places that are vacant. The…

Q: When does the present economy studies do or use? a. When interest rate is not given b. When time…

A: Economy studies is defined as the study, which used to provide the framework as well as the ten most…

Q: ___________ is the possible loss of revenue resulting mainly from a decline in the revenue base.…

A: There are various risks

Q: Which of the following statements true? I. All else equal, an increase in storage costs, decreases…

A: Storage cost is the cost of physically storing the assets by the treasuries, generally applicable in…

Q: Which of the following methods does not adjust for the time value of money: A internal rate of…

A: Capital Budgeting is a financial analysis technique which is used to evaluate the profitability of…

Q: Your answer is incorrect.  Divide the estimated average annual income by the average investment.…

A:

Q: Assuming no changes in other variables, which of the following would decrease ROA? C . An increase…

A: ROA=NET INCOMEAVERAGE ASSET AVERAGE ASSET IS INVERSELY PROPORTIONAL TO ROA.

Q: Why do the payback period analysis fail to recognize the difference between the present and future…

A: Pay-Back (PB) Period is time in which Initial outlay related to proposed investment is completely…

Q: What is the cost of accrued liabilities? If accruals have such a low cost, why don’tfirms use them…

A: An accrued liability refers to an expense a business has incurred during a specific period but has…

Q: what give rises to the changes in PBO balance?

A: PBO stands for the Projected Benefit Obligation. It shows how much the company would need in its…

Q: The unadjusted rate of return on the Initial tnvestment would be approximately.

A: Calculation of average income: Year Net income 1 30000   2 45000   3 50000   4 55000…

Q: have led to a drop in the required rate of return?

A: Required Rate of return is the minimum rate of return which an investor expects for investing in a…

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.