The discount rate to be used for calculating the present value of a stream of cash flow should be a)Bank rate b)Prime Lending Rate c)Treasury rate d)Opportunity cost

Q: Define the term loan cash flow?

A: Statement of cash flow: It refers to a financial statement that shows all the cash payments and…

Q: How is payback calculated with equal net cash inflows?

A: A payback period is the amount of time needed to earn back the cost of an investment. The length of…

Q: How is IRR calculated with equal net cash inflows?

A:

Q: If you disounted a set of positive real cash flows with a nominal discount rate and inflation were…

A: Justification:Suppose the positive cash flows are discounted with the inflation rate, which is…

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: Describe the key elements of the cash realization model. For each element described, discuss what…

A: Cash realization model: It is a time that a company takes to convert its input resources into cash.

Q: What is the maturity period required for an investment to qualify under the definitions of a cash…

A: Cash and cash equivalents correspond to just the line item on the balance sheet that lists the value…

Q: List the Interest formulas for single Cash Flows?

A: So now that we have the general formula which describes how a single cash flow moves through time:…

Q: s. What is the present value of these cash flows if the discount rate is 189%?

A: Present Value: It represents the present worth of the future annual cash flow stream. It is…

Q: What are the discounted cash flow techniques?

A: Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based…

Q: Estimating liquidity needs involves: A. forecasting the level of future loan commitments and…

A: Liquidity is the need of funds

Q: What are the interest formulas for single cash flows?

A: Present Value: The value of today’s amount to be paid or received in the future at a compound…

Q: what are the operational aspects of the discounted cash flow (DCF) method?

A: What Is Discounted Cash Flow (DCF)?  Limited income (DCF) is a valuation technique used to assess…

Q: What is the present worth for the investment represented by the given cash flow? Interest is 12%.

A: Present Worthbis the sum of present value of cash flows discounted at the required rate of return.

Q: How is IRR calculated with unequal net cash inflows?

A: Definition:   Internal rate of return method (IRR): Internal rate of return method is one of the…

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: What is Calculation of Net Cash Flow?  Please provide example.

A: Net Cash Flow: It is the total amount of money created or lost over a particular timeframe, normally…

Q: What cash flows are discounted in the FCFE model, and what is the discount rate?

A: FCFE MODEL: FCFR is known as free cash flow to equity or levered free cash flow, it is a model…

Q: ,Match the following terms with the appropriate definition.Effective yield or interest rateMonetary…

A: Eeffective yield or interest rate is a rate at which the amount invested actually grows over a…

Q: Describe the concept of present-worth analysis based on cash flow equivalence?

A: It is the equivalence analysis method under which cash flows of projects are being discounted to a…

Q: Describe the annual cash flow analysis, which presents measures of investment worth based on yield?

A: The question is based on the concept of cash flow and its analysis in terms of discounted value of…

Q: Which of the following methods consider the time value of money? A. payback and accounting rate of…

A: Time Value of Money The time value of money is the concept that money you have now is worth more…

Q: Find the present and future value of the cash flows shown in the figure

A: Present value is the current worth of the annuity at a given interest rate.…

Q: Describe the Investment-Credit Decision—A Cash Flow Perspective.

A: Answer: Every lender and borrower shall have their own conditions based on their needs and wishes.…

Q: Is the cash conversion cycle useful and important in financial analysis? Explain

A: The working capital is a short term fund, which is used to meet day to day operational costs of a…

Q: What is discounting and why do we discount future cash flows?

A: A cash flow statement is a financial statement that shows how much cash and cash equivalents are…

Q: What is difference between The earnings multiplier and Discounted cash flow model (DCF)? kindly…

A: Valuation is the process of determining fair value of an asset or a firm. There are various methods…

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: Using the data in the picture, compute the following: Current cash debt coverage and Free Cash Flow

A: The current cash debt coverage ratio is a form of liquidity ratio which measures the ability of the…

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: What is the incremental cash flows from switching credit policies?

A: Incremental cash flow is the extra cash flow a business will generate by investment in a new project…

Q: What is the traditional cash equivalency approach used to determine how below-market-rate loans…

A: Introduction: The given question is related to the concept of real estate finance and investments.…

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: Speculative Balance refers to holding of cash for future investment opportunities.

A: Speculative balance is the method used by the investors of holding money for making future…

Q: Why are the net present value and internal rate of return considered discounted cash flow methods?

A: Net present value is the comparison between the net cash inflows received from a future investment…

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: What is the essence of the discounted cash flow methods?

A:

Q: How is payback calculated with unequal net cash inflows?

A:

Q: Lowering the discount rate on a cash flow will its present value.

A: Discount Rate: It is the rate at which the cash flows over the period are discounted.

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.…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.