Describe the process of using the Income-Tax Rate in Project Evaluation?

Q: Define the term the working-capital investment?

A: The working capital is known as the net working capital which is the measure of the company’s…

Q: Which is the most efficient analysis method used to determine the project acceptability on an…

A: Present worth is a financial identicalness approach in which incomes of a venture are estimated at…

Q: Explain Rehabilitation Investment Tax Credits?

A: Income Tax Expenses: The expenses which are related to the taxable income of the individuals and…

Q: How capital expenditure(investment) analysis helps in making long term decision to determine…

A: Capital Expenditure Decisions include those decisions which require deciding on the purchase of…

Q: What kind of project is selected while comparing the mutually exclusive revenue projects?

A: Answer: Introduction: Mutual exclusive projects are such projects which will accept only one of the…

Q: Describe the method used to evaluate investment projects?

A: Answer: The following are the methods are used to evaluate the investment proposals of a company.…

Q: Explain the Calculation of Net Income Attributable to New Project?

A: Answer: Companies regularly estimate the income after meeting all the expenses due to the new…

Q: How the Income-Tax Rate to Be Used in Project Evaluation?

A: The income tax rate is used to determine the cash flow after tax. As cash flow after tax helps in…

Q: How can the calculation of Net Income Attributable be done to a new project?

A: The question is based on the concept of Net Income Attributable for new projects.

Q: What are the factors affecting the discount rate used in project valuation?

A: Higher discount rate provides less value and lower the discount rate higher the value of the…

Q: Does the accrual accounting rate-of-return method consider income earned throughout a project's…

A: The accrual accounting rate-of-return(ARR) formula splits the average income of an asset by the…

Q: Calculate the capital tax rate.

A: Debt financing is taxed favourably in the United States.Businesses can deduct interest payments on…

Q: How can we determine after-tax cash flows for an investmenta project with only operating and…

A: Discount rate is the weighted average cost of capital (WACC) which is used in the project.  WACC is…

Q: The accounting measure of a project's after-tax profit during a particular time period is known as…

A:

Q: Under what circumstances will you prefer profitability index to NPV as project evaluation…

A: Capital budgeting analysis is useful to know which projects are profitable and which are not. There…

Q: How is the project profitability index computed, and what does it measure?

A: Profitability Index Profitability index is define as the ratio of net present value of cash inflow…

Q: How are project classifications used in the capital budgeting process?

A:

Q: What is the difference between capital expenditure and revenue expenditure? Give an example of each.

A:

Q: What assumptions do you need to make in comparing these mutually exclusive revenue projects?

A: Answer: Mutual exclusive projects are such projects which will accept only one of the projects. For…

Q: How can the Income-Tax Rate be used in Project Evaluation?

A: The income tax rate is used to determine the cash flow after tax. As cash flow after tax helps in…

Q: Explain Estimating Development Cost and Interest Carry?

A: INTRODUCTION Estimating development cost in project management is the process of forecasting the…

Q: Explain for which types of projects, a detailed capital budgeting analysis is required and why?

A: Capital budgeting is a long-term investment decision process which helps to get good returns in the…

Q: Illustrate the conceptual basis upon which the practice of financial project analysis is built?

A: Net present value It is a concept through which the financial project viability can be analyzed. The…

Q: Determine the period necessary to recover both the capital investment and the cost of funds required…

A: The payback period alludes to what extent it takes for a speculator to hit breakeven to recoup the…

Q: What is the Incremental (Marginal) Tax Rate in Project Evaluation?

A: Tax:   A tax is a compulsory charge or a levy imposed upon a taxpayer by a government organization…

Q: Write the formula to evaluate the investment worth of projects?

A: There are many methods to evaluate the investment value of the project like Net Present Value,…

Q: When the weighted average cost of capital for a project is considered on an after tax basis, this is…

A: Answer: The correct option is (2) Marginal cost of capital

Q: method. Does the project offer an acceptable rate of return? Evaluate the profitability measure…

A: Revenue = $11 *106 Fixed costs = $2*106 Variable cost = $7*106 Depreciation is $2.4 *106 /year  for…

Q: ions used in the

A: Before making any investment the analysis of the future outcomes becomes necessary. Capital…

Q: When is a project is said to be a net investment?

A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…

Q: How to calculate the economic profit of each project?

A: Question 4 A: Economic profit is the profits arrived after deducting opportunity cost from the…

Q: How can we measure the true rate of any internal portion of an investment project?

A: The question is based on the concept of evaluation of different components of a project, it can be…

Q: Why is it important to make the distinction between company required rate of return (WACC) and…

A: WACC is the weighted average rate of return. It is the average cost of funding for a company.…

Q: Which investment return, expected or actual, does GAAP allow in the calculation of benefit cost?

A: Benefit cost: When an entity creates a benefit plan setting aside some moneys to meet future…

Q: Show and contrast how return on investment and residual income are used to evaluate the performance…

A: ROI  (return on investment =  ( Net Profit / Cost of the investment) X  100    Residual income =…

Q: make the distinction between c

A: Rate of return refers to the percentage of profit or loss on an investment for a specified period…

Q: Determine the real rate of return of this project on an after-tax basis?

A: The after-tax real rate of return is the net monetary benefit of speculation subsequent to modifying…

Q: Should capital budgeting decisions be made solely on the basis of a project’s NPV?Explain.

A: Capital budgeting decisions are based on various factors in which NPV is one of the factors which…

Q: Classify Revenue or capital expenditure?

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

Q: What is a true indicator of the project's profitability?

A: Answer: Capital budgeting is the whole project investment process and the decision of whether it…

Q: What tax rate should be used in calculating the taxes on the investment's projected income?

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

Q: How capital expenditure(investment) analysis helps in focusing particular projects and program ?

A: Expenditure in the company can be divided into two parts. Revenue expenditures:- expenditure…

Q: Explain the benefits of a Residual Income structure within an investment center framework.

A: The benefits of residual income are as under :  1) It takes into account the opportunity cost of…

Q: What is a sunk cost, and if included in a project how should they be treated?

A: Sunk cost is the cost which is already incurred and it is not relevant for decision making. Examples…

Q: Describe the procedure to consider the time value of money that is, the cost of funds used to…

A: Time value of money states that value of certain amount of money in present times is higher as…

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.