How do you evaluate an asset whose value is dependent on future cash flow expectations

Q: How do you calculate Fixed Asset Turnover? What is the Free Cash Flow Ratio? What is the difference…

A: The answers for the questions on accounting ratios are discussed hereunder : Fixed Assets turn over…

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: How is the value of an asset determined by predicted future cash flows?

A: The Answer

Q: Under IFRS, value-in-use is defined as: a.   net realizable value. b.   fair value. c.   future cash…

A: IFRS International financial reporting standards are guidance and framework provided for reporting…

Q: Which of the following is true about present value calculations? Other things remaining equal, the…

A: The value of any cash flow at immediate current date is called the present value(PV) which is…

Q: In a theoretical sense, the financial value of any asset is the present value of:

A: The Answer

Q: What factors affect the interest rate used to discount the cash flow expected from a financial asset

A: the interest rate that is used to discount the cashflow expected from a financial asset is nothing…

Q: Which of the following statements is true for historical cost valuations? (Select one or more)…

A: According to accounting principles, a historical cost is a method of valuing assets in which the…

Q: How do you evaluate an asset whose value is predicated on future cash flows?

A: Assets are the resources that are generally used for the purpose of revenue generation by the…

Q: What is the present value of the combined cash flows?

A: Present Value: It represents the present value of the future cash flow stream.  It is computed by…

Q: 1.A method of estimating property value by discounting on expected future cash flows to a present…

A: Comment- We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Finding the present value of future cash flows is called O A. analytics, tracking and finding the…

A: Capital Budgeting: It is a process a company undertakes for the evaluation of potential investments…

Q: Which of the following is the correct definition for present value (PV)?

A: Present value is an important concept in finance which is based on the concept of time value of…

Q: Choose the correct.Determination of net present value involves: A)forecasting future profits and…

A: Net present value method: Net present value method is the method which is used to compare the…

Q: Terminal value refers to the sum of all the net cash flows from an investment from the beginning to…

A: Given Statement, Terminal value refers to the sum of all the net cash flows from an investment from…

Q: How do investors account for risk when determining an asset’s value?

A: Asset valuation helps to determine the fair value of the asset. Various asset valuation models such…

Q: Describe the annual cash flow analysis, which presents measures of investment worth based on yield?

A: The question is based on the concept of cash flow and its analysis in terms of discounted value of…

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: About cash flows versus net income. Which should we use in present value calculations and why?

A: Net present value is the value of an investment in today’s worth. It is a capital budgeting…

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: How is the Salvage value a positive cash flow?

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: What is the significance of the FCF (Free Cash Flow) in the area of valuation?

A: Cash flows refer to the cash expenditure and cash receipt of the business over a specific time…

Q: In a theoretical sense, the financial value of any asset is the present value of: Select one: A. Its…

A: Net present value represents the difference in the present value of cash inflow and cash outflow.

Q: How would discounted cash flow be applied to fair vaue valuations?

A: Valuation of a company means to determine the intrinsic value of a company or the value which the…

Q: What role do incremental cash flows play in a replacement analysis?

A: Answer: Introduction: Replacement analysis is one of the key analyses in the concept of capital…

Q: Explain an example how to calculate rate of return on total assets.

A:

Q: What should be done to find the equivalent present worth of the actual dollar amount?

A: Present value is the concept of discounting future value to bring it to today’s worth.

Q: Explain the significance of time value of money in financial valuation?

A: Time value of money means the value of a sum of money in future is not the same as the value of…

Q: Which of the following phrases best describes the term " actual cash value"? a. market value b.…

A: Actual cash value is the actual amount at which the property could be sold and it is usually less…

Q: Relative Valuation links an asset's value to its inherent qualities, such as its ability to produce…

A: ( Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Will the carrying value of a long-term asset be equivalent to its market value under typical…

A: Here is the Answer

Q: When an asset or liability is initially recorded, what determines its amount? The Replacement cost…

A: When an asset or liability is initially recorded, it is recorded at its cost of acquisition.

Q: Calculate the present value and future value of an uneven cash flow stream.

A: A stream of cash flow is uneven  when all the amounts in the series of cash flows are unequal .i.e.,…

Q: How is valuation of any financial asset related to future cash flows?

A: Valuation of a financial asset=Present value of expected future cash flows

Q: g. The amount of money today that is consider equivalent to the cash flows expected to take place in…

A: Capital budgeting is the process of making decisions in long term assets. It is the process of…

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: Value in use is a) © Discount rate b) © Present value of future cash if flows c) © Uncertainty of…

A: The monetary value of an asset or liability is referred to as its value. The most accurate…

Q: Discuss and critically evaluate the relationship between risk and return. Discuss and critically…

A: Risk is measured by variability in returns.Higher the variability higher the risks under the…

Q: Discuss the two variables that must be considered whether you are using the present value of cash…

A: The discounted cash flow approach and the relative valuation approach are both used to value any…

Q: . How does one determine the value of any assetwhose value is based on expected future cash flows?

A: If there is an order of anticipated upcoming cash flows, cash flow technique is one of the finest…

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: The basic principle of valuation states that the value of any asset is: O The sum of the present…

A: The present value of an asset is the sum of all future cash flows discounted at the discount rate.

Q: Explain how the cash flows are structured in order to estimate thenet advantage to leasing

A: Net advantage to leasing (NAL) refers to the overall financial savings that might probably result…

Q: What is the estimated worth today of an amount of cash to be received (or paid) in the future…

A: When the amount to be paid or received in future is discounted to find its worth today, this is…

Q: How is the value of any asset whose value is based on expected future cash flows determined?

A: Answer: When there is a sequence of expected future cash flows, cash flow method is one of the best…