Q: Increasing interest expense will have what effect on EBIT?
A: EBIT stands for Earnings before Interest and Tax, the amount earned by the company from the…
Q: An increase in the discount rate will____ a. Reduce the present value of future cash flows b.…
A: Present Value of Cash Flows = Cash Flow(1+i)n
Q: the discount rate that equates the present value of the cash inflows with the present value of the…
A: In capital budgeting decisions calculate net present value is very important.
Q: Define the term reinvestment rate and describe how it differs for any cash flow series between (1) a…
A: Answer: Rate of return is nothing but the interest rate paid on the outstanding balance of money…
Q: What is Internal Rate of Return - Monthly Fixed Cash Flows with Reversions? Please provide…
A: The internal rate of return is the one of the discounted techniques of capital budgeting which is…
Q: True/false Under IFRS, the discount rate should reflect risks for which future cash flow…
A: False Refer step 2 for explanation
Q: What are net operating loss carryforwards and how can they provide cash savings?
A:
Q: An increase in the discount rate will______ O a. Reduce the present value of future cash…
A: This question can be solved with the help of 2 examples. Example 1 Initial investment=15000 Discount…
Q: What is Repayment cash flow?
A: Cash flows play a significant role in companies. It helps companies to identify the liquidity…
Q: In the net present method future, cash flows are discounted to their present value a)TRUE b) FALSE
A: Under net present value method all future cash flows are discounted to their present value .
Q: c. Use arrows to demonstrate, on the time line in part b, how discounting to find present value can…
A: NPV or Net present value method is a capital budgeting method to compare any two or more similar…
Q: limitation of discounted cash flow method.
A: Discounted cash flows - - Discounted cash flows method is used to estimate the value of an…
Q: If current liabilities increase, what is the effect on cash? What about a decrease in current…
A: Liabilities: The claims creditors have over assets or resources of a company are referred to as…
Q: What is A's interest after the first cash distribution?
A: JCA Partnership is entering into liquidation and the balance sheet of the partnership is given to…
Q: As the discount rate increases, the present value of a given future cash flow also increases. Do you…
A: No, I don’t agree with the statement. If the discount rate raises then the present value (PV) of…
Q: The purchasing power of money deteriorates over time. Please give short explanation and an…
A: The sale and purchase within market is made for the purpose of carrying exchange. Previously, the…
Q: What is the Time Value of Money (TVM)? Specifically, how do inflation and compound interest effect…
A: Time value of money states that a sum of money has more value today than the same sum at a future…
Q: impacts of inflation on money investment
A: Inflation occurs when prices across a sector or an industry increases, thereby decreasing 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: yback method, the Accounting Rate of Return, and Discounted Cash Flow Model (Ne
A: Step 1 A huge budget is a method through which a company assesses possible substantial projects or…
Q: Write the Interest Formulas for Single Cash Flows?
A: Time value of money: Time value of money refers to the concept that the value of money available at…
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: PRESENT VALUE FORMULA Please provide the formula for finding the Present Value of money and explain…
A: Definition: Time value of money: Time value of money refers to the concept that the value of money…
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: 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: How would an increase in the interest rate or a decrease in the number of periods until the payment…
A: Interest rate is defined as an amount of an interest due per period as the proportion of amount,…
Q: A change in money demand or a shift in the money demand curve is caused by a change in * the…
A: the increase demand of money shift the demand curve up.
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: The discounted payback method considers the time value of money as well as the cash flows after the…
A: Introduction: This question is related to the concept of capital budgeting. It is nothing but an…
Q: explain the concepts of compounding and discounting(Time Value of Money), and give practical…
A: The term compounding can be defined as future value of persent investment. Future value is an amount…
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: Briefly explain the concept of discounted-cash-flow analysis. What are the two common methods of…
A:
Q: What is meant by an incremental cash flow? What do you need to ask yourself when deciding whether a…
A: When a firm takes on a new project, there is new cash flow associated with this new project. The…
Q: the cash interest paid is:
A: Bonds are issued by company to raise funds for running business. Bonds are issued either at par…
Q: The discount rate to be used for calculating the present value of a stream of cash flow should be…
A: Discount rate is defined as rate of the return, which helps in the computation of the future's DCF…
Q: How is payback calculated with unequal net cash inflows?
A:
Q: Define Free cash flow
A: Cash flow statement Cash flow statement helps businesses to know the exact cash inflows and outflows…
Q: Which method does not consider the time value of money? Choose the correct. A. Net present value…
A: Net Present Value or NPV is a technique which determines the net present value of the project and it…
Q: How should I think about the discount rate in a discounted cash flow model, and what it means (in…
A: Discount rates are the rates at which cash flows over the estimated time period are discounted.…
Step by step
Solved in 3 steps
- Which of the following discounts future cash flows to their present value at the expected rate of return, and compares that to the Initial Investment? A. internal rate of return (IRR) method B. net present value (N PV) C. discounted cash flow model D. future value methodWhat is the effect on cash when current liabilities increase? A. Cash increases by the same amount. B. Cash decreases by the same amount. C. Cash decreases by twice as much. D. Cash does not change.An increase in the discount rate will______ O a. Reduce the present value of future cash flows O b. Increase the present value of future cash flows c.Have no effect on net present value Od. Compensate for reduced risk
- The internal rate of return is: the discount rate that equates the present value of the cash inflows with the present value of the cash outflows. the discount rate that makes NPV negative and the PI greater than one. the rate of return that makes the NPV positive. the discount rate that makes the NPV positive.Consider the calculation of an external rate of return (ERR). The positive cash flows in the cash flow profile are moved forward to t = n using what value of i in the (F|P,i,n–t) factors? a. 0 b. The unknown value of ERR (i′) c. MARR d. IRR.Determining the future value of one or more present day cash flows is known as ________. A. disinvesting B. annuitizing C. discounting D. compounding
- The discounted payback method considers the time value of money as well as the cash flows after the payback.Group of answer choices A.false B. trueAn increase in the discount rate will____ a. Reduce the present value of future cash flows b. Increase the present value of future cash flows c. Have no effect on net present value d. Compensate for reduced riskIf cashflows are discounted @ the net present value is zero. O a. RATE OF BORROWING O b. COST OF EQUITY O c. IRR O d. MIRR
- Value in use is a) © Discount rateb) © Present value of future cash if flowsc) © Uncertainty of cash flowsd) O Time value of moneyIf cashflows are discounted at____ the net present value is zero a. Internal rate of return O b. Wighted average cost of capital O c. Higher payback period O d. Any payback period[Question 6 Which one of the followingsituations will decrease the cash cycle as all elseheld constant?Select one:rateA. Decreasing the accounts payable periodB. Increasing the accounts receivable turnoverC. Increasing the inventory periodD. Decreasing the inventory turnover rate