What alternative approaches can be used to estimate variable consideration?

Q: What is sensitivity analysis? Explain.

A: Financial models refer to the summary or brief of a company's performance, on the basis of the…

Q: How do the Internal-Rate-of-Return Criterion relate to the PW Analysis?

A: Capital budgeting:   It is the process in which the business uses to determine which proposed fixed…

Q: Define the term cutoff values?

A: Cut-off values for diagnosis or screening examinations that have constant outcomes (estimated on a…

Q: Discuss the sensitivity of the model to changes in the value of the input variables

A: It is a technique that is used to get the estimates of independent variables by changing the…

Q: Define then discuss Value-at-Risk.

A: The stock market is full of new policies and procedures. It get impacted by change in the government…

Q: What is the significance of the Value at Risk (VaR) method?

A: The question is based on the concept of Value at Risk (VaR). VaR is a statistical measure of risk in…

Q: What are the basic criteria for selecting a forecasting model?

A: The process that is used to anticipate the demand for the product or service of the business is…

Q: How to Estimate the  Variable Consideration?

A: Revenue:   It is the income generated by the business over their regular business operations.

Q: What are the different variables in sensitivity analysis?

A: Answer: Under a given set of expectations, a sensitivity analysis describes the way different values…

Q: Describe the method for conducting sensitivity analysis for mutually exclusive alternatives?

A: Sensitivity analysis is a financial model that decides how target factors are influenced by changes…

Q: What are Required Assumptions and Decision Frameworks for replacement analysis?

A: Replacement analysis:   It is an analysis tool in capital budgeting decisions. An asset life tends…

Q: Define the term predictive value.

A: Predictive value refers to the fact that quality financial information can be used to base…

Q: Explain the Sensitivity Analysis?

A: The sensitivity analysis is utilized to comprehend the impact of a lot of autonomous factors on some…

Q: ffective rate?

A: The given problem can be solved using EFFECT function in excel. EFFECT function computes effective…

Q: What is the meaningful total variance for performance evaluation purposes?

A: Flexible budget: A flexible budget is a budget prepared by the company for effective evaluation of…

Q: Define variable consideration.

A: Variable considerations: Contracts having a degree of variability in the specified transaction…

Q: What is the Internal-Rate-of-Return Criterion?

A: Internal rate of return (IRR): The internal rate of return (IRR) is a measure utilized in capital…

Q: Describe how to estimate variable consideration.

A: Revenue: It is the income generated by the business over their regular business operations.

Q: When using the high-low method, should you base the high and low observations on the dependent…

A: Cost Function:Cost function represents the basic change comes in the total cost due to the change in…

Q: What is net present value (NPV) profile?

A: Net present value profile is mainly the graphical representation of net present value of different…

Q: How is benchmarking beneficial?

A: Benchmarking is a measure which determines a company's competitive position through comparing its…

Q: What is residual value? Support your answer with an example

A: Residual value is also called as salvage value

Q: How is the ERC (efficient response coefficient) determined and which role analyst forecasts play in…

A: The earnings response coefficient, or ERC, is a calculated ratio between stock returns and the…

Q: Differentiate between sensitivity analysis and scenario analysis.What advantage does scenario…

A: Differentiate between sensitivity analysis and scenario analysis: Scenario analysis involves…

Q: Sensitivity analysis is the analysis of the effect of parameter changes on the optimal solution.…

A: Sensitivity analysis is done to understand changes in a target variable when changes are made in…

Q: When we perform sensitivity analysis for mutually exclusive alternatives, itmay be more effective to…

A: Net present worth is acknowledged as the current worth or value of a project which is adjusted as…

Q: How to estimate the Residual Value?

A: Residual value means value of fixed asset left after the use of fixed assets. Residual value also…

Q: Does the Analysis Period differ from Project Lives? Explain how?

A: In a financial term, the Analysis Period is a period of financial analysis of financial statements…

Q: What is the difference between positive and negative predictive value?

A: Positive predictive value is the probability that subjects with a positive screening test truly have…

Q: Which investment return, expected or actual, does GAAP allow in the calculation of benefit cost?

A: Benefit cost: When an entity creates a benefit plan setting aside some moneys to meet future…

Q: Explain Measures of Variance and Risk?

A: Variance tests normal or normal variability. Variability is volatility for investors, and volatility…

Q: What are some strengths and weaknesses of sensitivity analysis and scenario analysis?

A: Sensitivity Analysis determines how the dependent variable changes when the independent variable…

Q: What are some examples of variable consideration? What are the two approaches for estimating…

A: Variable consideration: It is an amount which is included in the contract as consideration. An…

Q: How do you find the standard quantity for efficiency variance?

A: Management should pay particular attention to those that are uncommon or noteworthy. Firms may…

Q: Describe the procedure to compute the variance of return for a project?

A: Variance is ascertained as follows: The mean worth is dictated by including all the information…

Q: When we work with the breakeven point, how important is it to understand what a decision variable…

A: The question is related to Marginal Costing. The break-even point is that level of sales at which…

Q: are return on investment, residual income, and EVA qualitative components?

A: Qualitative components refer to the intangible effect of the events and transactions of business…

Q: What is the replacement analysis?

A: Replacement analysis is one of the keys examinations in capital budgeting.

Q: What is Modified Internal Rate of Return (MIRR) method?

A: Internal rate of return (IRR): The internal rate of return (IRR) is a measure utilized in capital…

Q: How can we Consider Project Risk by Discount Rate?

A: In corporate finance, a discount rate is the rate of return used to discount future cash flows back…

Q: How is the process of the NPW measure implemented with the decision rule?

A: As an organization expands, it needs to take important decisions that involve immense capital…

Q: What is a sensitivity analysis?

A: Sensitivity analysis:Sensitivity analysis ascertains the manner in which the different values of an…

Q: Define the term Sensitivity Analysis?

A: Sensitivity analysis is a financial modelling tool which aims to analyze the change in output…