Answered: The area of financial management that…

Business

Finance

The area of financial management that addresses the optimal choice for long term assets is

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 6Q: What amounts should be recorded as a cost of a long-term asset?

See similar textbooks

Related questions

Q: Calculate the Dividends per Share and Earnings per Share for each year for Brown Company

A: Earnings Per Share: It represents the earnings of a firm for each share held by the shareholder. It…

Q: The previous year's balance sheet for Brown's Produce showed total common equity of $4,050,000 and…

A: Book value per share refers to the value of common equity as per the balance sheet of the company. A…

Q: What rate compounded monthly will yield the effective rate 19.75%?

A: Effective rate is 19.75%. Monthly compounded.

Q: Assume the total cost of a college education will be $350,000 when your child enters college in 15…

A: Compound interest refers to the method of earning a return where the interest earned in a period…

Q: Work in Excel, Your coin collection contains fifty 1952 silver dollars. If your grandparents…

A: Future value is the estimated current value of assets, securities, and other commodities at a…

Q: Find the discount interest rate if Php15,000 is the present value of Php20,000 which is due at the…

A: We need the discount interest rate given the present value (PV) and the future value (FV). This is a…

Q: What were some interesting things you learned about analyzing financial data? Please explain rea

A: The main rationale of analyzing financial data is to measure a company's financial performance over…

Q: Select the in iges below to enlarge. Balance Sheet Murawski Company Balance Sheet December 31…

A: Current ratio is a liquidity ratio which is trying to calculate the ratio between current assets and…

Q: Operating cash flow. Find the operating cash flow for the year for Harper Brothers, Inc. if it had…

A: Operating Cash Flow: It represents the cash generated by the organization from its normal business…

Q: Laurel’s Lawn Care Limited has a new mower line that can generate revenues of $120,000 per year.…

A: In the given case, we have provided the revenues , direct cost, fixed cost . Depreciation is…

Q: An engineer must decide between two ways to pump concrete to the top of a seven-story building. Plan…

A: STEP 1 The length of time they cover is the key distinction between a lease and a rent arrangement.…

Q: Suppose that the market return is 13.3% per year and the risk free rate averaged 4%. The risk free…

A: Market Return (Rm) =13.3 % Average risk free rate (Rf) =4% Risk free rate now =5% A Project with the…

Q: Assume interest rate parity holds. The one-year risk-free rate in the U.S. is 4.98 percent and the…

A: Forward rate can be calculated as = Spot rate x (1+Foreign Country Interest Rate) / (1+ Domestic…

Q: What is the covariance and the correlation coefficient between HD and ML? xx

A: Given standard deviation of market index σM =0.15 Therefore, the variance of market index is σM2 =…

Q: Find the discount interest rate if Php15,000 is the present value of Php20,000 which is due at the…

A: The discount interest rate, also known as the discount rate, is the rate at which a financial…

Q: Mortgage payments Principal: $210,000.00 Interest Monthly Rate Payment 3% 3.5% 4.25% A. $210,000 C.…

A: In mortgage loan the monthly payment are amortized over the loan period. The monthly payment is…

Q: The treasurer of Tropical Fruits, Inc., has projected the cash flows of Projects A, B, and C as…

A: In the given case, the cash flows of each project is given along with the discount rate is 12% per…

Q: O O D 9,550 9,550 9,550

A: Given required rate of return for both the project =11% First we have to find out the total Present…

Q: ill receive $9486 at the end of Year 2. At the end of the following two years, he will receive $7971…

A: Future value of the amount include the amount that is being deposited and amount of interest…

Q: Which of the below statements is false for equity? A. Limited liability B.Residual claim on firm…

A: Equity holders are one among the stakeholders of a company. Equity holders or shareholders are the…

Q: stock sells will be e

A: The cumulative voting is a type of voting in which shares will be accumulated and applied towards…

Q: You are to make monthly deposits of $875 into a retirement account that pays an APR of 9.5 percent…

A: An annuity is a financial product that pays out a fixed stream of payments to an individual,…

Q: Describe at a high level the various cost categories and expenditures.

A: Expenditures refer to money spent on goods, services, or investments. It is the amount of money used…

Q: The Meadows Corporation needs to raise $52 million to finance its expansion into new markets. The…

A: Issue of shares is one of the important source of finance being used in business. Some commission…

Q: Use the stock table below to find the year-to-date percentage change Idno Tech (ITX). VOL NET PE…

A: The year-to-date percentage change is a measure of the total yield generated from the start to the…

Q: Work in excel, In 2020, a Detective Comics No. 27, featuring the first appearance of Batman, was…

A: The value of an investment or an asset or a financial security usually increases with passage of…

Q: An investment will pay you $83,000 in five years. Assume the appropriate discount rate is 6.75…

A: The concept of time value of money will be used to solve this question. We need to find the…

Q: Explain the role of regulators in monitoring and enforcing ALM policies and limits. Describe how…

A: The Asset liability management reflects the function in the financial industries which will be…

Q: part a. The spot rate between the Japanese yen and the U.S. dollar is ¥106.70/$, while the…

A: STEP 1 An idea for forecasting future foreign exchange rates is interest rate parity. These exchange…

Q: The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M.…

A: Net Present Value A set of cash flows is said to have a net present value or net present worth if…

Q: Consider the following information regarding the performance of a money manager in a recent month.…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: 15. If HUS 's stock is currently trading at AED 60 and HUS has 12 million shares outstanding, total…

A: Note:- Multiple questions are asked. According to bartleby guidelines , first question needs to be…

Q: A. Judy's Boutique just paid an annual dividend of $3.61 on its common stock. The firm increases its…

A: The return that investors anticipate from their investment as compensation for the risk they assumed…

Q: Apex Corporation is considering the purchase of Pinnacle Company in a stock-for-stock exchange.…

A: Earning per share is a ratio that shows the earing of investors on each share. It's a financial…

Q: Suppose that the index model for two Canadian stocks HD and ML is estimated with the following…

A: STEP 1 Systematic risk is a risk associated with the overall market, whereas unsystematic risk is a…

Q: to finance the development of new product a company borrowed 26000 at 7% compounded monthly. if loan…

A: Data given: Loan amount= $ 26000 (Assumed $) rate= 7% compounded monthly Loan is to be repaid in…

Q: Determine the values of X and Y so that all three cash flows are equivalent at an ipterest rate of…

A: Please refer to the excel spreadsheet below. The solver function in excel has been used to find the…

Q: Today, is January 4, 2016. IBM common stock is selling at $135.95 per share. The stock has a…

A: Delta and gamma hedging are strategies used in portfolio management to reduce the risk associated…

Q: What is the market value of a $1,000 face-value bond with a 10% coupon rate when the market's rate…

A: The annual income that a bondholder can anticipate while owning the bond is known as the coupon…

Q: Ricky Ripov’s Pawn Shop charges an interest rate of 18.25 percent per month on loans to its…

A: APR (Annual Percentage Rate) and EAR (Effective Annual Rate) are two ways of measuring the cost of…

Q: 1. Suppose there is a mutual fund and each consumer buys a share in it for her endowment at t = 0.…

A: a. The mutual fund's optimization problem is to maximize the sum of the present values of the…

Q: years

A: Find the total purchase price , Then deduct the value of the debt from it, and get the find the…

Q: Discuss the importance of monitoring and reporting on the institution's compliance with its ALM…

A: Answer Assets Liability Management(ALM) - is used for manage financial Risk as a result of mismatch…

Q: Suppose that the year-end prices for one ounce of gold is the same as that of the data shown in the…

A: The HPR of an asset refers to the profit as a percentage of the initial price of the asset that has…

Q: ond price is not $808.66. What is the price of the bo

A: Price of bond is the present value of coupon payments and present value of par value of bond based…

Q: Find the EAR in each of the following cases. (Do not round Intermediate calculations and enter your…

A: Formula to be used: EAR=1+APRnn-1 where n= number of compounding per year

Q: A project has an initial cost of $75,000, expected net cash inflows of $15,000 per year for 8 years,…

A: The profitability index is a measure of the attractiveness of a project by finding the ratio of the…

Q: Luther Industries has 25 million shares outstanding trading at $18 per share. In addition, Luther…

A: Formulae:- Value of equity = number of outstanding shares * trading price. Value of firm = value of…

Q: Use the formule for continuous compounding to compute the balance in the account after 1, 5, and 20…

A: Given, P = $17,000 APR = 4.5% =4.5/100 = 0.045 For continuous compounding, The amount will be, A =…

Q: Annuity due. Reginald is about to lease an apartment for 12 months. The landlord wants him to make…

A: The rate of return on borrowing money to purchase a commodity on the spot market and selling it on…

Question

The area of financial management that addresses the optimal choice for long term assets is

Approach to decide on the efficient procurement and investment of funds for the day-to-day operations of a business. Financial management aims at profit maximization, and it includes financing and capital budgeting.

Expert Solution

Step 1

The long term assets are all such assets which are used by the company for more than one year and they have future benefits associated with them which will increase the value of company over the period of time.

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

The area of financial management that addresses the choice of long-term assets in which a firm will invest is
Capital budgeting is the decision making process used in the acquisition of long term physical assets True False
How to compare different assets in investment selection process? What are the quantitative characteristics of the assets and how to measure them?
What is the MOST important variable of the financial planning process? Select one: a. The costs b. The capacity of the fixed asset c. The pro forma income statement d. The sales forecast
The process by which management plans, evaluates, and controls long-term investment decisions involving fixed assets is called capital investment analysis. True O False
Explain the factors responsible for determination of the firm's optimal Fixed assets capacity
How to compare different assets in investment selection process
How can we determine the period necessary to recover both the capitalinvestment and the cost of funds required to support the investment?
What costs should be included when measuring the total cost to acquire a long-term asset?
How capital expenditure(investment) analysis helps in making long term decision to determine acceptability of project?
Determine the period necessary to recover both the capital investment and the cost of funds required to support the investment for a project?
Explain an example how to calculate rate of return on total assets.