Relative Valuation links an asset's value to its inherent qualities, such as its ability to produce cash flows and the risk associated with those cash flows.
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Q: Which of the following does not assign a value to a business opportunity using time-value…
A: Answer : D Payback period method
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Q: Which of the following statements is correct? The NPV method assumes that cash flows will be…
A: Solution:- Net Present Value (NPV) means the net of the present value of cash inflows and initial…
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A: Sunk Costs is that cost which was already incurred on the project before starting the Project these…
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A: Introduction: The internal rate of return (IRR) is a research and consulting metric used to assess…
Q: One method for calculating enterprise value includes the present value of which of the following…
A: Enterprise value : total value of the company that shows how much will it cost to buy the firm.
Q: Is this statement true or false? please explain in detail The Discounted Cash Flow method is the…
A: The value of an investment is calculated using the discounted cash flow (DCF) approach based on the…
Q: Explain what is meant by the internal rate of return of an investment and discuss its relationship…
A: Honor code Since you have asked multiple questions, we will solve the first question for you. If you…
Q: Assets are priced such that _____________________ increase with the riskiness of future payoffs. A)…
A: Solution:- Payoff means the amount which is receivable on maturity.
Q: All of the followings are True when the net present value method is used to choose between two…
A: Net present value is the excess of present value of cash flows over cash outflows or initial…
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A: Payback period (PBP) refers to the period or duration within which the company is able to recover…
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A: The working capital is the funds it needs to carry out day-to-day operations like cash, accounts…
Q: When using the NPV method for a particular investment decision, if the present value of all cash…
A: When NPV method is used the investment is measured on three scenarios Positive NPV Where the…
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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.
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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: (c) Why is net present value considered to be a superior method of evaluating the cash flows from a…
A: The concepts of capital budgeting tools can be used here to answer the questions. There are…
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Q: In the discounted cashflow method, the discount rate is used for the following reasons EXCEPT a. it…
A: Discounted Cashflow Method: The discounted cash flow (DCF) approach is a method of valuation that is…
Q: The net present value of an investment represents the difference between the: present value of cash…
A: To determine the value of NPV, NPV is the difference between the present values of future cash flows…
Q: Which investment criteria answers the question: "How quickly do we recover our investment, in…
A: Pay back Period is that under which we will received / Recover the investment amount for starting…
Q: The average duration of its assets is longer than that of its liabilities. There is a…
A: Risk is the uncertainty associated with an investment. Higher the risk more is the return and lower…
Q: explain the unique characteristics of the asset class, their associated risks and potential returns.…
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Q: Explain how sunk costs and cannibalisation affect the determination of an investment’s incremental…
A: Introduction : . Simply put, sunk costs refers to the costs that has already been incurred and the…
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Q: The present value of an investment's future cash flows divided by its initial cost is the: O Net…
A: The present value of an investment is calculated by applying the time value of money concept to the…
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A: The question is related to Capital Budgeting. The MNC's need to study sensitivity related to…
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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: What is the expected return of investing in asset M alone
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Q: All else being equal, a company would choose to invest in a capital asset if which of the following…
A: Answer: If the expected accounting rate of return is greater than the required rate of return.
Q: True or False Relative Valuation links an asset's value to its inherent qualities, such as its…
A: Relative Valuation links an asset's value to its inherent qualities, such as its ability to produce…
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- 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 methodWhich of the following statements is true? a. The fixed asset turnover ratio assists managers in determining the estimated future capital expenditures that are needed. b. The average age of the fixed assets is computed by dividing accumulated depreciation by depreciation expense. c. If net sales increases, the fixed asset turnover ratio will decrease. d. A relatively low fixed asset turnover ratio signals that a company is efficiently using its assets.True or False Relative Valuation links an asset's value to its inherent qualities, such as its ability to produce cash flows and the risk associated with those cash flows. Value is futuristic. Equivalent to the present worth of all expected future benefits from ownership. A company's liquidation value is determined by its future cash flows. The Cost Approach Model adjusted the anticipated cash flows by discounting them to the valuation date using time value of money principles and a risk-adjusted discount rate that represents the asset's risk. The greater the size of an asset's cash flows, the lower the asset's value.
- Which of the following statements describing the elements of intrinsic valuation is most accurate? A.) When the present value of the cashflows is discounted with the appropriate rate and this present value is positive, then the asset providing these cashflows has a value to the investor. B.) The risk-free rate is the lowest rate that an investor can earn from short-term investments. C.) Cashflows may include depreciation expenses and amortization costs. D.) A simple calculation of present values of expected cashflows of different investments using the risk free rate would be enough to determine which asset is best.Which of the following statements is true for historical cost valuations? (Select one or more) a. Present value of cash flows using historical interest rates is an item in which cash receipts or cash payments will occur over time, these future cash flows are then discounted at the interest rate in effect at the time of the initial transaction. Balance sheet examples include notes receivable and notes payable. b. Acquisition cost is the amount paid initially to acquire the asset, examples include prepayments, land, and intangibles with indefinite lives. c. Acquisition cost is the amount paid initially to acquire the asset, examples include amounts invested in research and development for intellectual property. d. Adjusted acquisition cost is the amount paid initially to acquire an asset less accumulated depreciation and amortization, examples include equipment and intangible assets with limited lives.Discounted cash flow (DCF) valuation is based on the notion that the value of an asset is the present value (PV) of the expected cash flows on that asset, discounted at a rate that reflects the riskiness of those cash flows. Specify whether the following statement about DCF valuation is true, false, or uncertain? Explain your answer assuming that all variables are constant except for the one mentioned: “As the discount rate increases, the value of an asset increases”.
- The basic principle of valuation states that the value of any asset is: O The sum of the present value of all cash flows generated by the assetO The sum of all future cash flows generated by the assetO The present value of next year's cash flow onlyO The degree of cash flow riskiness is not a relevant factor in valuationThe book value is derived by subtracting the total liabilities of a company from its total assets. (True / False) The tools used for valuation can vary among evaluators, businesses, and industries. (True / False) The main difference between the discounted cash flow method and the profit multiplier method is that it takes inflation into consideration to calculate the present value. (True / False) Valuation is the process of estimating how a business will performed in the future. (True / False) kindly answer allThe risk-return trade-off from investing in current assets refers to an increased risk of: a. Liquidity versus decreased profitability. b. liquidity versus increased leverage. c. Liquidity versus increased profitability. d. Liquidity versus increased profitability.
- Which of the following does not assign a value to a business opportunity using time-value measurement tools? Group of answer choices A. internal rate of return (IRR) method B. net present value (NPV) C. discounted cash flow model D. payback period methodFair Value Accounting and Valuation in 3 Steps: Asset or Liability Identification: The first step involves identifying the specific assets or liabilities that will be measured at fair value. This could include financial instruments, tangible assets, intangible assets, or other items on the balance sheet. Market-Based Valuation Techniques: Fair value is determined using market-based valuation techniques. This may involve assessing current market prices, recent transactions, or employing valuation models such as discounted cash flows, comparable sales, or option pricing models. Consistent Application and Disclosure: Fair value accounting requires consistent application of valuation methods across reporting periods. Additionally, transparency and disclosure are crucial, with companies providing detailed information about the inputs, assumptions, and methods used in fair value measurements. Objective Type Question: In fair value accounting, what is the primary purpose of…What does it mean to adopt a maturity matching approach to financing assets, includingcurrent assets? How would a more aggressive or a more conservative approach differ fromthe maturity matching approach, and how would each affect expected profits and risk? Ingeneral, is one approach better than the others?
