How can we determine the period necessary to recover both the capitalinvestment and the cost of funds required to support the investment?

Q: Identify the cash flow series associated with production or service over thelife of the asset?

A: Definition: Cash inflows: The amount of cash received by a company from the operating, investing,…

Q: Explain in details the rationale and the treatment of change in net working capital items during the…

A: NPV:  When performing financial research to assess the viability of investing in a project or…

Q: How to calculate net present value with capital expenditures.

A: Capital expenditure refers to the amount incurred by the busi9ness in purchasing fixed assets for…

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: Apply the procedure to find the true IRR, or return on invested capital, of the mixed investment?

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

Q: for information on MACRS depreciation.) What is the required net investment, and what are the year 1…

A: Net Investment= Cost of equipment  + freight and installation cost= 900000+100000=1000000 The net…

Q: What basic principle of finance can be applied to thevaluation of any investment asset?

A: Investor invests in any investment to earn the returns from it. As per the risk and return analysis,…

Q: The importance of cash flow management when evaluating proposals for capital expenditure?

A: All investments in capital assets are expected to earn a return, which is evaluated by comparing the…

Q: What are the after effects (both short term and long term) of capitalizing the cable costs of…

A: Capital expenditures (CapEx) are cash outlays made by a company to purchase, improve, and maintain…

Q: Why does capital budgeting rely on an analysis of cash flows rather than on net income? Base your…

A: Since, there are more than one question is posted at a time. The answer for first question is only…

Q: What is the maturity period required for an investment to qualify under the definitions of a cash…

A: Cash and cash equivalents correspond to just the line item on the balance sheet that lists the value…

Q: What is required to achieve their investment objective, investors generallymake outlays for various…

A: Tolerance of risk level It is the risk level in the market as due to frequent market fluctuation an…

Q: How can you explain working capital management? Explain different policies/approaches to manage…

A: The working capital is the capital that is used in the business for successful running of day to day…

Q: Net Present Value

A: Net Present Value is a method of evaluation of investment alternatives in capital budgeting. This is…

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: Do the financial statements provide the basis for future investment analysis?

A: Yes, financial statements are helpful in providing the base for the analysis of investment in the…

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: 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: Why must the Engineers consider the effective use of fixed capital assets?

A: Engineer indulge in numerous process of decision-making such as manufacturing, financing, and…

Q: Explain why the cost of capital is measured on an after-tax basis why is use of a weighted average…

A: This question consists of two subquestions i.e.  (a) Explain why the cost of capital is measured on…

Q: Which of the following scenario shows the financial manager’s financing function? a. Prioritizing…

A: Financial manager's functions include: a) Getting financing at lower cost b) Planning and allocating…

Q: Is it ever appropriate or acceptable to use the payback method of evaluating capital investment…

A: Introduction: Capital budgeting is an investment criterion or decision making mechanism for…

Q: Why should the capital expenditures be capitalized?

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

Q: What is the first impact on asset turnover of promptly expensing a cash outlay compared to…

A: The Answer :

Q: Explain Initial Capital Contributions with example?

A: Initial contributions are generally made by members to take part in the company's interests. Many…

Q: Explain the difference between capital assets, capital investments, and capital budgeting.

A:

Q: Does the Diversification require regular evaluating the assetsand realigning the investment mix?…

A: As an investor, the main objective of investment is to maximize return on investment. An investment…

Q: Capital investment decisions involve investments in long-term operational assets.  TRUE OR FALSE?

A: Capital investment decision: These decisions are made by the management to utilise the capital funds…

Q: how to decide and choose between investments if capital is rationed? Assess the timing effect of…

A: Here asked for multi question we will solve for first question for you.  If you need additional…

Q: acquiring capital assets for future use is one type of capital expenditure proposal. true or false

A: Capital expenditure (or capex) refers to those expenditures that are incurred by a company for…

Q: Why does the interest in the original investment or the capital cost is included as a cost in the…

A: The annual worth method is the method in which all the cash flows are equally distributed across the…

Q: Describe the principles of asset valuation. Distinguish between the required rate of return and…

A: Asset Valuation means that a company or business is studied to understand what will be the intrinsic…

Q: Which of the following step is followed immediately after evaluating the proposals under capital…

A: The following step that is followed immediately after evaluating the proposals under capital…

Q: Which of the following are the key factors when determining asset allocation for an investment? I.…

A: Asset allocation can be defined as the strategy which involves allotment of assets of portfolio of…

Q: Discuss and evaluate the impacts of an asset revaluation on future financial statement? Use and…

A: Impacts of an asset revaluation on the future financial statement: Revaluation of assets leads to…

Q: Explain the meaning of the terms working capital and working capital management in a succinct…

A: Every business requires a sufficient amount of capital and working capital to ensure that the day to…

Q: Which of the following is considered not a Capital expenditure? a. Training costs b. Delivery costs…

A: Lets understand the basics. As per IAS 16 "Property, plant and equipment", initial cost for PPE…

Q: Why would an investor prefer the payback period to other methods of capital investment appraisal

A: The investor prefers the payback period to other methods of capital investment appraisal because in…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.