Is the accept-or-reject decision rule the same as in the simple -investment case? Explain how?

Q: Which is the better investment option?

A: The process of finding the present value using the future value, interest rate and the compounding…

Q: What does a failed net-investment test indicate?

A: Answer: Net investment test: The company will not overdraw at any stage on its return, and is thus…

Q: is the intuition behind multiples or comparables valuation? What are the advantages of this m

A: Multiple method is very common method of valuation of stock in market.

Q: What is meant by a “real option”?

A: Real option: It may be a selection made open to a firm's managers about the prospects for trade…

Q: What is the difference between a Put option and a Call option? Explain. Provide examples.

A: Option is a derivative instrument which gives a choice to its buyer to buy or sell the underlying…

Q: Explain what is Make-or-Buy Decision?

A: Decision making: It is a vital capacity in the management, since decision making is identified with…

Q: What are the shortcomings of the internal rate of return criterion?

A: Solution- Internal Rate of Return (IRR)-      The Internal Rate of return (IRR) is that the discount…

Q: Are you agree with the phrase(sentence): "The indifference (exchange) risk - return curve slop of a…

A: Exchange rate indifference curve indicates that the change in demand for goods and services with…

Q: what is the difference between a call option and a put option?

A: There are two types of options one is call option and other is put option and both are derivative…

Q: What assumptions and limitations does multiples valuation have?

A: Multiple valuation or relative valuation is a market based valuation method where the target company…

Q: Explain Simple versus Nonsimple Investments?

A: The question is based on the concept of different way of investments.

Q: In a qualitative analysis, what factors affect the value of a real option?

A: An alternate choice that is accessible to the organization's managers taking investment…

Q: If you are to choose between viability and profitability, which one would you choose? Why?

A: A company's viability indicates that it is (or has the potential to be) profitable. A profitable…

Q: When Decision making is affected by both personal perspective and characteristics this phenomenon…

A: Decision making is referred to as the process of making choices through an identification of the…

Q: Explain Decision Rule for Nonsimple Investments?

A: In a simple investment, cash flows change sign only one time. For example, negative cash flow in the…

Q: What is option?

A: Options are the derivatives contract that gives investor discretion to sell or buy the assets like…

Q: What is in-the-money option?

A: Option is a financial instrument that gives the right to buy/sell an underlying in future date at a…

Q: Does greater risk imply a bad investment?

A: Risk assessment is the process for identifying and assessing risks associated with achieving your…

Q: Why option A is incorrect?

A: revenue is generated by the business whenever  goods or services are sold by the business.this leads…

Q: What are the arguments for and against 'Stakeholder Theory'? Examine several arguments for and…

A: Stakeholder Theory is an idea about how business really works. According to it, for any business to…

Q: Which alternative should be selected? Use a challenger-defender rate of return analysis.

A: Given,  Particulars Projects A($) B($) C($) D($) Initial investment 8500 18500 26500 30000…

Q: averse

A: Risk is involved in everything. Risks will be there right from the task that we do till the…

Q: What are some types of real options?

A: Real options is defined as a capital budgeting decision with which the management may make a future…

Q: What exactly does "FMS option" mean?

A: The term FMS stands for flexible manufacturing system. It is a manufacturing system which is…

Q: What are the limitations of TCE approach to the make or buy decision?

A: TCE Approach is Transaction Cost Economics Theory. It means an activity should be performed within…

Q: Explain Make-or-Buy Decision?

A: Meaning:  It is a decision which is made to either manufature a product or service in house ( by…

Q: What is the decision rule for payback?

A: Payback period is the period of time taken by the project to recover the investment in such project…

Q: payback period, NPV, and IRR always lead to the same decision? Why or why not? If not, which one…

A: Step 1   One of the most essential choices a business owner or management will ever make is capital…

Q: which investment is preferable?

A: The present value is the present worth of the amount that will be paid or received at present.

Q: Considering the unequal investments, which of the following techniques would be most approprlate for…

A: Payback Period: It is the period in which the project recovers the cash outflow.   Net Present…

Q: What is out-of-the money option?

A: Out of money options are generally preferable for the investors. This is because they are more…

Q: Define the Make-or-Buy Decision?

A: A make or buy decision is to choose whether to manufacture the produce in-house or purchase it from…

Q: What is the make or buy decision?

A: Managerial accounting:   Managerial accounting is more focused towards analyzing information and…

Q: Distinguish between simple and nonsimple investment with examples?

A: A simple investmentUnder it, there is negative initial cash flow and in the series of net cash flow,…

Q: NOT right for the buy-and-hold investment strategy?

A: Strategy refers to the plan which is followed by the managers to achieve the goals of an…

Q: What is a real option?

A: Real option It may be a selection made open to a firm's supervisors approximately the commerce…

Q: What is frequency regarding the make or buy decision?

A: Make or Buy: Make or Buy decision are normal condition arises in front of management due to…

Q: What is a real option? What are some types of realoptions?

A: Real options: Real options are considering as right but not obligation to take a business decision.…

Q: What is the buy option?

A: A buy option involves two types which are : Buy call option Buy put option

Q: What is value at risk, VaR?

A: Value at Risk (VaR) is a financial metric that estimates the risk of an investment. More…

Q: What is an unbalanced bid? Why might one be used?

A: Bidding involves an offering by an individual or business for setting the price of a product a…