What is downsizing?

Q: How does the Broader Diversification Reduce Risk?

A: Portfolio is a pool of different investments/assets. Investors can categorize the risks in two…

Q: Define the term internal rate of return?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: Why is partitioning an internal rate of return important?

A: Introduction: There are two cash flow components which can form the portioning of internal rate of…

Q: What are value drivers?

A: Answer: The basic determinants of the cash flows of a project or primary factors in project…

Q: What causes the marginal rate of return to change over time?

A: Introduction: Marginal rate of return can be defined as the return attained or earned by holding a…

Q: What is the meaning of economic value added (EVA)? What does it measure? Why is it important?

A: Economic value added ("EVA") measures a company's financial performance based on the excess wealth…

Q: What does ROI measure?

A: Return on Investment: Return on Investment is a profitability measure which determines a company's…

Q: Why is the declining-balance method most widely used?

A: Double-declining-balance method: The depreciation method which assumes that the consumption of…

Q: What are economic resources?

A: Economic resources: Assets or services of an organization carrying some economic value which can be…

Q: what is the present value

A: The time value of money means that the amount of money received in the present period will have…

Q: How does the change in the PBO occur?

A: Projected Benefit Obligation:   It is a pension concept in accounting as it is the present value of…

Q: What does horizontal analysis try to reveal ?

A: Horizontal analysis of financial statements involves comparison of a financial ratio, a benchmark,…

Q: What is meant by the term abnormal rate of return?

A: Abnormal rate of return is return earned above or below the normal rate of return.

Q: What is the relationship between present value and future value?

A: Future Value : FV is that value which will be received in near future. Present Value : PV is that…

Q: What is lessor?

A: A lease is the agreement between two individuals. Under the lease agreement one individual provide…

Q: What is fundamental value or price?

A: Fundamental value is a measure of what an asset's worth. This gauge is acquired by methods for an…

Q: Why are principles of valuation important?

A: Valuation Principle: The process of calculating the fair market worth of a financial asset is known…

Q: What are some motives for divestitures?

A: The question is based on the concept of divestiture strategy, which is used by company to overcome…

Q: What does the elimination process accomplish?

A: Intercompany elimination:   Intercompany elimination refers to the process in which the transactions…

Q: Explain Present Value?

A: Present value is the current value of a future sum of money or value. Present value is useful to get…

Q: What is the present value

A: Present Value can be calculated using the following formula: Present Value = Annual cash flow /…

Q: What is the nature of research and development costs?

A:

Q: What is securitization?

A: Introduction: Finance reflects a broad variety of spaces where decisions can be taken relative to…

Q: What is an opportunity cost and why should it be included when making decisions?

A: Opportunity costs is the costs of next best alternative foregone by accepting current alternative.…

Q: wHAT IS PRESENT VALUE?

A: Present value also known as PV is the value of a future sum of money discounted at specified rate of…

Q: Which are the benefits of diversification?

A: The question is based on the concept of diversification. Diversification is a technique to spread…

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: What is the decision rule for payback?

A: Payback period is the period of time taken by the project to recover the investment in such project…

Q: What is the meaning of valuation?

A: Valuation simply refers to the process of ascertainment of the worth of any thing, it can be worth…

Q: what is the new balance (in $)?

A: Average Daily Balance Credit card companies normally use average daily balance  to charge interest…

Q: which investment is preferable?

A: The present value is the present worth of the amount that will be paid or received at present.

Q: What is market efficiency?

A: Market Efficiency term is taken from a paper written by Eugena Fama in 18970. Fama acknowledges that…

Q: What is breakup value?

A: Answer: Break-up value is nothing but a valuation that suggests the business will be split into…

Q: what is Political cost hypothesis ?

A: The financial statement will be prepared by the company to know the financial position of the…

Q: Define devaluation

A: Currency- Currency is defined as money in terms of paper or coins which is issued by the government.…

Q: What is the meaning of Resource Market?

A: In business terms, anything which acts as input and contributes to the production process refers to…

Q: What is the financial advantage (disadvantage) of further processing the intermediateproduct?

A: Further Processing means carrying the production of goods to another level and shifting its…

Q: . What is its present value?

A: Introduction: Compound interest can be defined as the interest on either a loan or a deposit which…

Q: What is Profit and Loss (PNL)?

A: A business organisation is established with an objective to make money and increase the worth of the…

Q: What is return on investment?

A: Return on investment  is a financial ratio which is measured as net income divided by the cost of…

Q: What is Economic Value Added ?

A: Economic value added is used for measuring the financial performance of a company based on the…

Q: What do we mean by a lump-sum Problem?

A: A lump-sum payment is a substantial amount of money paid all at once as opposed to in installments.…

Q: How does a small buisness owners role change over time?

A: Given: The role of the owner in small business changes with time.

Q: What are the risks associated with conversion cycle and changes need to reduce that risks?

A: Cash conversion cycle The cash conversion cycle is a method that tracks the time a company would…

Q: What should the transfer price be and why?

A: Given that: Transfer price as proposed by Top Division = $256 Price that is charge to outside…

Q: What is net present value? Can it ever be negative? Explain.

A: Net present value: Net present value is a technique used in capital budgeting to see the project is…