How does an “opportunity cost”,  subtracting from the revenue of an alternate course of action, bring the result of the incremental income?

Q: What is the Economic Value Added (EVA) method? Provide a definition, state a formula, and define all…

A: Economic Value Added (EVA): EVA also called economic profit is a measure of the financial…

Q: When we reduce Total expenses from Revenue , the result is called as ........... a. Cost b. Revenues…

A: Revenues is the total receipts of the business irrespective of the cost incurred. Expenses are the…

Q: Which of the following best defines the concept of a relevant cost? a. A past cost that is the same…

A: Relevant Cost: it is a cost which is used for taking decision  for the business management. this…

Q: Which of the following is not an advantage of the average rate of return method? a.includes the…

A: Average rate of return is a method of calculating return on the asset

Q: Match each of the following terms with the best definition. A. Theory of constraints B. Sunk cost…

A: Given the following question: Theory of constraints Sunk cost Differential analysis Opportunity…

Q: Under what circumstances might a salary or bonus be more appropriate than interest on capital…

A: Partnership: The form of business entity which is formed by an agreement, owned and managed mutually…

Q: During a period of steadily increasing purchase costs, whichinventory flow assumption results in the…

A: FIFO method (Firstt in First Out method) : Under this method, the inventory issues will be recorded…

Q: what are the meaning of Revenue Enhancement and Cost Saving ? and I need examples for each.

A: Revenue enhancement is the enhancement or increase in the revenue, which also leads to an increase…

Q: The excess present value method is anchored on the theory that the future returns, expressed in…

A: The excess present value method is also known as a net present value which required the present…

Q: Why is NOPAT a better performance measure than net income?

A: NOPAT stands for Net Operating Profit After Tax. It refers to the organization's earnings before tax…

Q: Which of the following methods does not consider the investment’s profitability? a. ARR b. Payback…

A:

Q: what are the incremental earnings (net income) associated with the new machine?

A: Earnings: It is the income for the company after taking into account expenses and depreciation and…

Q: ected rate of return concept differ from that of the rea

A: There are many method of valuation of stock based on expected rate and realized return and dividends…

Q: Can we compute the IRR for each option without knowing the revenue figure? Why?

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

Q: What is the economic rationale for the cost approach? Under what conditions would the cost approach…

A: Answer: Economic rationale for cost approach: The cost approach means that the person who is…

Q: Identify and differentiate or define the types of

A: There are mainly two types of payback analysis : 1. Payback period 2. Discounted payback period

Q: What is passive income? Explain and give examples.

A: Passive Income  An income from a source which is somewhat diverse than  a contractor or an employer…

Q: A term that refers to a situation where the revenue function is equal to the cost function.

A: Revenue function and cost function are two important terms used in cost volume profit analysis. The…

Q: What is meant by residual income?

A: Net income: The bottom line of income statement which is the result of excess of earnings from…

Q: Why opportunity cost is measured and relate with the evaluation of alternative, can it be an…

A: Cost or expenditure is the total amount spent by an individual, group and company to make a finished…

Q: Match each of the terms below with its definition. 1. Sunk cost a. Additional costs incurred from a…

A: Costs: It may be classifed as sunk costs, opportunity costs etc. some kinds of costs are relevant…

Q: The difference between the expected return and the actual return is referred to as the unexpected…

A: The excess amount over invested value that an investor estimates to realize over horizon of…

Q: Compute the Revenue Effect- Growth Component, indicate if favorable/(unfavorable).

A: The Revenue effect of the Growth component shows the effect of the change in units sold on the…

Q: Which of the following methods does not consider the investment’s profitability? ARR Payback NPV…

A: Average rate of return (ARR) and Internal rate of return (IRR) are methods of computing rate of…

Q: Why is there a need for reducing accruing expenses?

A: Accruing expenses are also called as accrued expenses. These are the expenses for which the company…

Q: Why is "Projecting Growth Beyond What the Capital Being Valued Will Support" considered a common…

A: Income Approach There are two different model which was incurred in the income approach.  The…

Q: Why can we not invest net income? Explain with an example?

A: The net income is the net profit of the company earned during the period. The net income includes…

Q: Which investment return, expected or actual, does GAAP allow in the calculation of benefit cost?

A: Benefit cost: When an entity creates a benefit plan setting aside some moneys to meet future…

Q: Surplus of income over expenses is ______________.

A: Income: Total income is sales revenue of the company.  Expenses: Expenses are those charges which…

Q: What is meant by incremental revenue or incremental cos

A: Incremental Revenue Incremental Revenue means is an additional revenue earned from selling one…

Q: profits and losses equally

A: Correct Answer :- B Peter  P170,000. And  john P90000

Q: How does the residual income approach overcome this problem?

A: Definition: ROI: It is a measure of the amount of return on a particular investment with respect to…

Q: Explain the benefits of a Residual Income structure within an investment center framework.

A: The benefits of residual income are as under :  1) It takes into account the opportunity cost of…

Q: required: (d) What is the new Residual income if Proposal 1 is selected? (e) What is the new…

A: The residual income can be defined as the income earned over and above the opportunity cost of the…

Q: TRUE or FALSE The cost should match with the revenue generated. It only means that with every income…

A: Introduction: Accounting: Accounting is an art of recording, classifying , summarizing and…

Q: What are “initial direct costs” and how are they accounted for by lessees and lessors?

A: Initial Direct Costs: Initial direct costs refer to the costs that a lessor incurs directly while a…

Q: ompensation income may be in the form of monetary or in-kind benefit. TRUE OR FALSE?

A: Compensation means the amount a company give to its employees for services rendered.

Q: How can charges be utilized to accomplish the monetary objectives of full work, value strength, and…

A: Monetary policy is referred to an actions, which used to be undertaken by the central bank of the…

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.