Define the term capitalize.

Q: Define capital structure decision

A: The capital structure is an appropriate mixture of a firm's debt and equity used to fund its overall…

Q: What costs should be capitalized for a self constructed asset?

A:

Q: Define the term capital expenditure.

A:

Q: Why is it important to match your funding with economic life of corresponding asset?

A: The use of assets economic life matching with funding can be an integral tool for financial…

Q: Describe term net asset value (NAV)?

A: Net asset value (NAV): It describes an entity's net worth, which is measured as the complete value…

Q: calculate the capitalized value

A: Capitalized Value is the actual amount of an asset. It is considered when there is ownership of an…

Q: Define the term capitalized cost?

A: A Capitalized Cost is the cost incurred in the purchase and financing of fixed assets. It includes…

Q: How changes in capital structure effect WACC?

A: The two types of borrowing available in capital markets are equity and debt. The concept of capital…

Q: What is the notion of capitalization effects and how does it work

A: The notion of capitalization effects and how does it work will be explained:

Q: Explain how the cost of capital serves as a screening tool when using the net present value method.

A: Definition: Net present value method: The net present value method is the method that is used to…

Q: In your own view, how important is asset allocation? Discuss the various strategies of asset…

A: Since each asset class comes with a different degree of risk, it becomes important to balance the…

Q: briefly the concept of the capital components of the capital adequacy framework and provide an…

A: The capital adequacy ratio (CAR) is a ratio used to know the relationship between the bank's…

Q: Explain the meaning and composition of the "return" of a financial investment

A: Financial Investment Funds invested for the purpose of earning returns over a specified period of…

Q: Define Interest Capitalization.

A: Interest Expense: The cost of debt which is incurred during a particular accounting period is called…

Q: Distinguish between a simple and a complex capital structure.

A:

Q: What is the difference between VaR as it has been traditionally measured and stressed VaR? Explain…

A: A definition of value at risk is as follows: Value at Risk (VaR) is a metric that estimates the size…

Q: What is a capitalization rate? What are the different ways of arriving at this rate for an…

A: Capitalization rate: Capitalization rate is the projected rate of return percentage that a property…

Q: In general terms, what is the Capital AssetPricing Model (CAPM)? What assumptions weremade when it…

A: CAPM: The capital asset pricing model (CAPM) is a method utilized to determine a hypothetically…

Q: Discuss the Cost of capital approach ?

A: Cost of capital is the required return necessary to make a capital budgeting project, such as…

Q: Identify and discuss the two components of contributed capital

A: Contributed capital Contributed Capital is the price that the share holders have given to the…

Q: Describe how the value of any asset is determined.

A: An asset can be any tangible or intangible asset that can be owned by a business or individual to…

Q: What is a capital asset?  Why do we care about the treatment of assets as either capital or…

A: Capital assets is an assets which are generally not meant for sale but for investment purpose which…

Q: Derivation of capital asset pricing model

A: The Capital Asset Pricing Model (CAPM) relates the returns on individual assets or entire portfolios…

Q: Define a financial asset

A: A contractual financial instrument is classified into financial assets and liabilities. They are an…

Q: Which types of investments are valued at amortized cost? Explain the rationale for this accounting.

A:

Q: Explain the method of direct capitalization method?

A: The three approaches to value a business or an investment are the Income based,  Market based and…

Q: Discuss, using practical example how revenue expenditure should not be capitalized?

A: SOLUTION- Thus, a revenue expenditure which increases the utility or productive capacity of an…

Q: Why should the capital expenditures be capitalized?

A: Capital Expenditures:   Capital expenditures are those which provide future economic benefits by…

Q: Define Return on assets.

A: Introduction: Return on Assets : Return on assest is a ratio which defines that how much profit…

Q: Define capital gain (loss)

A: Whenever an asset is sold, the seller incurs either a profit or a loss. The asset may be a real…

Q: The amount to be capitalized should be:

A: Answer:   Option a.

Q: Access the glossary (“Master Glossary”) to answer the ­following. a.    What does it mean to…

A: Answer: To capitalize an item means to use the item for the long term in the business and disclose…

Q: Explain the blended capitalization rate and where it can be applied?

A: The rate which is a combination of the previous rate and the new rate charged on a loan is called a…

Q: Define how to record capital expenditure.

A: Capital expenditure: It refers to the amount spent on acquiring, maintaining, and improving the…

Q: What is an example or scenarios of Capital Allocation Line (CAL)?

A:

Q: Cost of Capital depends on its components and cost associated with its components’. Justify the…

A: The cost of capital repersent of company repersent its cost of financing. It referes to minimum rate…

Q: Classify Revenue or capital expenditure?

A: Introduction: Revenue Expenditure: Its a Recurring expenditure. Expenditure spent with in 12 months…

Q: What is capitalization and what are its capabilities?

A: Capitalization may likewise state as the idea of changing over some thought into a business or…

Q: What is a capital expenditure versus a revenue expenditure?

A:

Q: Explain, using practical example how Capital expenditure should be capitalized?

A: Capital expenditure can be defined as an expense made for the purchase of a long-term physical or…

Q: Distinguish between physical asset markets and financial asset markets.

A: Physical Asset markets are markets where buyers and sellers transact in tangible goods which can be…

Q: What is a simple capital structure?

A: Capital structure Capital structure refers to a combination or mix of equity and debt in order to…

Q: Explain Amortize Goodwill? Give an example?

A: Amortize Goodwill: Goodwill is an intangible asset amortization of goodwill means a reduction in the…

Q: Define the term elements associated with investment activities?

A: In a simple language investment is like investing money to get a return out of it or to get more…

Q: Example of Capital Allocation Line (CAL)

A: Capital allocation line: Capital allocation line is also named as capital market line. Capital…

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.