How can we estimate Risky Cash Flow?

Q: what is the projected cash flow statement?

A: Cash flow statement: The cash flow statement shows only inflows and outflows of cash. It does not…

Q: What is Interest Rate Risk and Cash Flow Risk

A: Interest rate risk: The interest rate risk is the risk that occurs due to the change in the interest…

Q: What is free cash flow (FCF)?

A: Free cash flow (FCF): It speaks to money a firm creates after accounting for cash outflows to back…

Q: What is a cash flow hedge?

A:

Q: Describe the procedure of Estimating Risky Cash Flows?

A: Risky cash flow means the future cash flow which falls short of the expectations. This shortage may…

Q: what are usefulness and weakness of discounted cash flow method?

A: Discounted Cashflow Method is the Method in which we compare Initial Project cost with expected…

Q: How would a reduction in the cash conversion cycle increase profitability?

A: Cash conversion cycle (CCC): It is a metric that speaks to the time it takes for a business…

Q: Define cash flow hedges.

A: Derivatives:   Derivative is a product whose value is derived from underlying assets called base.…

Q: Where does a strong cash forecast begin?

A: What is a Cash flow forecast? A cash flow forecast is an estimation of the amount of cash flow into…

Q: What is the causes of the financial risk?

A: financial risk - financial risk is the possible danger of losing money from an investment made by…

Q: Do we use the term risk to describe an investment project where cash flows are not known in advance…

A: Cash flows refer to the amount of net cash and cash equivalents that flow in and out of the…

Q: Cite the advantages brought about by an effective cash flow forecasting

A: The method of making an estimation or prediction of any company's projected financial situation is…

Q: What are free cash flows?

A: Companies always estimate cash flows to know the financial conditions of the company because it is a…

Q: How much is the expected cash flow disregarding other simulations?

A: Capital budgeting is a method used for finding the profitability of investment proposals. It…

Q: What is normal cash flow project?

A: Cash flow refers to the amount of cash that the company receives from investing into a project.…

Q: What is financial risk?

A: Risk refers to the undesired consequences arises due to the uncertainty. In other words, risk refers…

Q: Why is it true that a reinvestment rate is implicitly assumed whenever we find thepresent value of a…

A: Discounting is the method of assessing the real value of a potential transaction or collection of…

Q: What is the purpose of a cash flow hedge?

A:

Q: What are the three estimates of risky cash flows?

A: Companies always predict the cash flows related with the project because it helps to company to…

Q: Explain with an example of how we can balance cash investments?

A: Cash investments are short term investments, normally less than 90 days, which usually provides…

Q: Why is the free cash flow valuation model so widely used?

A: With the free cash flow of the firm, administrators will focus on potential businesses that increase…

Q: How can we predict the future cash flows in a project?

A: Cash flows refer to the amount of net cash and cash equivalents that flow in and out of the…

Q: What is irregular cash flow stream?

A: Cash Flow has a flow concept. There can either be cash inflow or cash outflow. Generally, for…

Q: What is the process of solving a cash flow for an unknown interest rate?

A: Time Value of Money: According to the concept of TVM, the company always interested to know the PV…

Q: What is discounting and why do we discount future cash flows?

A: A cash flow statement is a financial statement that shows how much cash and cash equivalents are…

Q: What are the two fundamental approaches of the Probabilistic Cash Flow Analysis?

A: Two fundamental approaches of probabilistic cash flow analysis are as follows: 1) Scenario analysis…

Q: Discuss the limitations of the traditional discounted cash flow (DCF) analysis

A: Discounted cash flow determines the present value of the future cash flow of the company. It is…

Q: What is Equilant cash value?

A: Cash and cash equivalents alludes to the detail on the balance sheet that reports the estimation of…

Q: When is the financial risk by far the most critical element to consider?

A: Introduction: Risk can be characterized in terms of the uncertainty of future consequences resulting…

Q: Is it true that the the wider the risk premium, the lower the price of a expected future cash flow?

A: Risk premium is the return the stock gives over the risk free asset. risk premium = Rs-Rf Wider risk…

Q: Describe the process of estimating Risky Cash Flows?

A: Process of estimating Risky Cash flows.

Q: How can we compute incremental cash flow, and IRR?

A: Incremental cash flows and IRR, both are the terms of Capital Budgeting decisions. Incremental cash…

Q: What cash flows are associated with Descartes’ rule of signs and Norstrom’s criterion?

A: Cash flows series can be of two types i.e. non-conventional and conventional cash flow series. Non…

Q: What are the strenghts and weaknesses of the discount cash flow methods?

A: discounted cash flow methods are used to calculate to find the future cash inflow discount into its…

Q: What is the difference between Cash Flow Risk and Interest Rate Risk? Please explain it clearly so…

A: Risk is referred to as the possibility of putting oneself or someone in unfortunate…

Q: Which is least likely correct about security valuation? a. The calculated or determined value…

A: Security valuation is technique o knowing the value of securities.

Q: What is free cash flow valuation model?

A: Free cash flow (FCF) is the amount of money available to an organization at their complete disposal,…

Q: Does a risky investment always equal a big payoff and vice versa?

A: Risky investments are played by risky people only. Lets take an example for better understanding. Mr…

Q: What are some actions a firm can take to shorten its cash conversion cycle?

A: The cash conversion cycle is the time period between the out flow of cash for purchasing raw…

Q: Explain the Hedging against cash flow risk.

A: Hedging is a strategy by which a financial instrument is used to minimize the risk created by the…

Q: “The greater the discount rate, the greater the present value of a future cash flow.” True or false?…

A: Present Value: The value of today's amount expected to be paid or received in the future at a…

Q: What is the CAPM beta? How is it different from Cash Flow beta? Provide intuitive explanation and…

A: Beta is an important component of the CAPM- capital asset pricing model, which calculates the cost…

Q: Why are we more likely to need to calculate the PV of cash flow streams than the FVof streams?

A: The present value of cash flows is the value of future cash flows at the time zero. The present…

Q: What are the strenghts and weaknesses of the Discounted Cash Flow methods

A: Cash flow is the movement of money from a particular investment. Discounted cash flows mean…

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.