Explain how estimation of service lives can result in unrealistically high carrying values for fixed assets.

Q: What happens if economic engineers invest too much in assets?

A: Economic engineers always combine finance with engineering and develop various models to deal with…

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 current asset is typically the least liquid?

A: Introduction: Current assets are those assets with a high liquidity and that can normally be…

Q: When net profit margin is low, must be high in order to achieve on acceptable return on assets.*

A: In accounting we know that ROA = net income/total assets

Q: The excess return required on a risky asset over that earned on a risk-free asset is called (a):…

A: A risky asset's return is higher than a less risky asset. But due to the inherent higher risk, there…

Q: do liquid assets frequently have lower rates of return than fixed assets?

A: Liquid assets are the cash or cash equivalents which can be drained out frequently whereas fixed…

Q: In order to overcome the differences in the preferences of surplus units and deficit usnits, it may…

A: The large institution takes funds from the small investors and they prepare large amount of funds…

Q: Describe the following terms: (a) residual value, (b) guaranteed residual value, and (c) initial…

A: (a) Residual value: It is the projected ending value of an asset after its useful life or lease…

Q: Problems with a fixed cost that is incurred only if an activity is undertaken at a positive level…

A: If there is a conduct of any activity at any positive level then it incurs an amount of fixed cost…

Q: Describe the strengths and weakness of payback method.

A: Definition:   Payback method: Payback method refers to the method which measures the time period…

Q: The total fixed costs and  Operating Income were incorrect,

A: Solution: Total fixed costs = Fixed manufacturing costs + Fixed selling and administrative expenses

Q: The term stands for technical, economic, legal, operational and schedules feasibility. Discuss these…

A:

Q: Which of the following would be considered a sunk cost? a. purchase price of new equipment b.…

A: Sunk Costs: Sunk costs are those costs incurred in the past and it cannot be changed unless if any…

Q: Define the concepts of Dept capacity and Unused debt capacity? and if unused debt capacity was…

A: Debt Capacity: In general terms, it is the amount of debt that a business can incur and repay it as…

Q: What are some costs associated with high inventories? With lowinventories?

A: Cost associated with inventories are also known as inventory cost. Inventory cost can be classified…

Q: In computing the present value of an investment in equipment, the present value of the residual…

A: Net Present value = Present value of future cash flows + Present value of terminal cash flow -…

Q: Demonstrate why expressing fixed costs on a per unit of activity basis is misleading and may result…

A: Companies can have two types of costs, fixed costs and variable costs, which together result in…

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: True or false:  The levels of fixed-cost assets and funds that management selects affect the…

A: In Funds management there are managers who manage the funds and based on their skills and talents…

Q: Explain the risk-return trade-off for liquid assets.

A: Risk return trade off tell relationship between the risk and return.

Q: Requiring a relative short pay-back period for projects indicates a high risk avoiding propensity…

A: In capital budgeting payback period is an important tool used in capital budgeting. Payback period…

Q: The ___ the expected return from a financial asset, the ____ the risk of not getting the money back…

A: Expected Return of Financial Asset:It is the expected profit or loss that is earned from the…

Q: Why are inventories valued at the lower-of-cost-or-netrealizable value (LCNRV)? What are the…

A:

Q: No, the present value of the machine is less than the cost by over

A: Cost of machine =$114000 Period =10 years  Annual income =$12000 interest rate=1.6% compounding…

Q: What is the difference between an accounting break-even and a break-even NPV? Which will offer the…

A: Break-even point = Total Fixed Costs / Contribution margin per unit   Break-even ratio = Annually…

Q: nitial Margin and maintenance margin ensure that the clearing house will never be at a loss. Do you…

A: Clearing house is an intermediary between a buyer and seller responsible for settling trading…

Q: Why put the normal loss costing into the true loss account for abnormal loss?

A: Cost accounting: Cost accounting is a form of managerial accounting that aims to capture a company's…

Q: The marginal cost of an asset is equivalent to its EUAC. True or False?

A: Marginal Cost of Asset means the cost required to run the asset for the next period. EUAC =…

Q: Explain Amortised cost and how to calculate it.

A: Amortized cost refers to the cost that helps to allocate the cost of financial/intangible assets…

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: What is the financial advantage (disadvantage) of further processing the intermediateproduct?

A: Further Processing means carrying the production of goods to another level and shifting its…

Q: The following provides information regarding Assets X and Y. Calculate the expected rate of return,…

A: Data given: Asset X Probability Return(%) 0.10 8 0.20 9 0.30 11 0.40 12   Asset Y…

Q: What keeps plotted revenue data from falling on a straight line in a break-even analysis?

A: Revenue data do not fall on a straight line when plotted in a graph in a break-even analysis because…

Q: What are the shortcomings of the payback period?

A: Payback period: The payback period assesses the time period required to recover the initial…

Q: Why is the fixed asset riskier than current asset?

A: In financial accounting, the company's financial statements assets are classified into two…

Q: Which of the following is a disadvantage of the IRR project evaluation method? Select one: a. It…

A: IRR is the rate at which NPV is zero.

Q: what are the projected total operating assets? Do not round intermediate calculations. Round your…

A: Introduction:- First we calculate ratio of each operating assets of last year to last year's sales…

Q: Which control is not a part of the fixed asset system?a. formal analysis of the purchase requestb.…

A:

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…

Q: When a capital investment is expected to provide unequal annual cash inflows, the payback period…

A: Payback period: It can be defined as the time that investment takes before it starts generating…