Explain the periodicity assumption.

Q: The NPV of the replacement is $        ?

A: Net present value is the difference of discounted cash inflows and outflows.

Q: Explain breakeven analysis.

A:

Q: How is ARR calculated?

A: ARR: Accounting Rate of Return (ARR) is the rate of return earned on the investment made in a…

Q: Determine the so-called Theta of the Black-Scholes (BS) Formula, i.e. OBS

A: For European Call options (non dividend paying stocks) theta to be calculated as follows using BSM.…

Q: Explain constant prepayment assumptions?

A: Prepayment refers to the settlement of debt before its actual due date. The model which determines…

Q: What are the important feature of a perpetual system?

A: Perpetual inventory system: The method or system of maintaining, recording, and adjusting the…

Q: Define the term Continuous Compounding?

A: Continuous compounding is as far as possible which accumulating funds can surpass in the event that…

Q: Explain AMENDMENT OF TIME FRAMES?

A: Time frame is the slot if time under which something has to occur or planned. Here, time frames…

Q: What are the use of time series?

A: Time series is a sequence of different points which occurs at successive orders at different time…

Q: Define revaluation

A: Revaluation holds many meanings in different fields. In financial terms, it is the adjustment and…

Q: Explain compound interest.

A: Compound interest.

Q: E Periodic LIFO

A: Correct answer :- A $ 544

Q: How does the change in the PBO occur?

A: Projected Benefit Obligation:   It is a pension concept in accounting as it is the present value of…

Q: What is periodic rate?

A: A periodic rate is a rate that can be paid on a credit or acknowledged over a fixed timeframe on…

Q: Explain rebalance

A: Rebalancing is the strategy for realigning portfolio weightings. Rebalancing incorporates buying or…

Q: What is modified breakeven analysis?

A: Break even analysis refers to the financial computation that weights the new business cost, product…

Q: Define continuity assumption

A: Accounting:   It refers to the process of recording the financial transactions of the business in…

Q: Describe the revaluation model.

A: Introduction: The revaluation model stretches a business the option of carrying a fixed asset at its…

Q: What is a subsequent event?

A: Financial statements are the records containing the trading account, profit and loss account and the…

Q: Define the term Time-based methods.

A: Allocation method: It is a method in which allocation base is expected to be consumed during the…

Q: Define Baumol model

A: The main usage of Baumol model is that it helps the firm in determining the cash balances under the…

Q: Explain when to use the single-period model and when to use a multi-period model.

A: The difference between the two models is that the multi-period model may involve the stock leftovers…

Q: What are roll-forward procedures? Provide some examples

A: Roll-Forward Procedure: Auditors perform procedure to draw out the conclusion from an interim date…

Q: What is multiple IRRs?

A: Multiple IRRs IRR is a discounting rate at which an amount of investment equals PV of the future CF.…

Q: IRR analysis is based on the

A: IRR (internal rate of return) is one of the capital budgeting techniques that is used in order to…

Q: How can we determine a Compounding Period?

A: A compounding is the interest charged on interest. When any investment is made for certain years,…

Q: What are the Replacement-Analysis Fundamentals?

A: Replacement analysis refers to the process where an organization determines whether it is beneficial…

Q: Describe the process of calculating NPV.

A: Net Present Value (NPV) is a capital budgeting technique which uses a discount rate to bring all the…

Q: perating cycle?

A: Definition: Operating cycle: Days by which, a business can be able receive inventory or sell it or…

Q: Determine the IRR

A: IRR is the discount rate where NPV of the cashflows calculated using IRR will be Zeera, which means…

Q: Explain title Mechanics’ Liens?

A: Lien is a right of posession of an asset; in case, debts are not discharged by the owner of the…

Q: Define : Perpetual system and Periodic system

A: Inventory is one of the current asset of the business. It includes inventory of raw materials, work…

Q: Define Prepayments.

A: Step 1 The outflow of money to reduce the liabilities occurred in the current accounting period…

Q: What is compounding frequency?

A: Compound interest - In this method, the interest is calculated on the balance at the end of each…

Q: Explain differential analysis

A: Differential Analysis involves understanding the purpose of different costs that may arise from…

Q: Define discriminant function

A: DISCRIMINANT FUNCTION- If we have a set of K classes then we may define a set of K discriminant…

Q: Periodic Concept

A: The periodic concept is also called the time interval concept. It specifies the time period during…

Q: Define time line

A: Timeline is referred as the representation of a chronological sequence of events which is drawn such…

Q: Define time-series analysis

A: Time series analysis is an important technique used in statistics in finance. It has been defined in…

Q: Consider the following information as part of a breakeven analysis:

A: Given:

Q: Define Periodicity assumption.

A: Generally Accepted Accounting Principles (GAAP): These are the guidelines necessary to create…

Q: Explain direct-effect noncompliance.

A: Direct-effect noncompliance: Direct-effect noncompliance produces direct and material effects on…