What is more important for asset valuation? Cash flow or accounting profit? Please fully explain the reasons for your choice.

Q: Identify the cash flow series associated with production or service over thelife of the asset?

A: Definition: Cash inflows: The amount of cash received by a company from the operating, investing,…

Q: Demonstrates the difference between depreciation costs as expenses and the cash flow generated by…

A: Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income…

Q: Explain how the cost of capital serves as a screening tool when using (a) the net present value…

A: Cost of capital:   Cost of capital is the required return necessary to make a capital budgeting…

Q: How to compare different assets in investment selection process? What are the quantitative…

A: One of the important decisions that financial managers are supposed to take is that they have to…

Q: What determines the value of an economic asset (as opposed to an asset that has value for reason of…

A: Asset value is an important component of a company's total value and it can be…

Q: Outline how you would incorporate the following into the CCAPM:a. Liquidity.b. Nontraded assets. (Do…

A: The question is based on the concept of the consumption based capital asset pricing model (CCAPM).…

Q: Realizable value

A: Which one of the following terms best describes the amount of cash or cash equivalents that could…

Q: Do you think a company like Target would have significant research anddevelopment costs or…

A:

Q: How do you evaluate an asset whose value is predicated on future cash flows?

A: Assets are the resources that are generally used for the purpose of revenue generation by the…

Q: haat is the relationship between Income Measurement and Asset Valuation?

A: Profit or loss calculation is indeed a simplified method of calculating income. An accountant…

Q: What element should be assessed when considering the quality of profit and loss and balance sheet.

A: The elements are as follows: Leverage is a measurement of the business's ability to meet long-term…

Q: Explain how the cost of capital serves as a screening tool when using the net present value method.

A: Definition: Net present value method: The net present value method is the method that is used to…

Q: Discuss the ways in which the concept of present value as utilized in making financial decisions

A: The term present value refers to the formula or function that is used for determining the present…

Q: How is can CAPM, Sharpe ratio, Treynor measures and Jensen’s Alpha be used to maintain positive…

A: The performance of portfolio or investment should not evaluated only using the return of portfolio…

Q: what are some pros and cons of holding high level of current assets in relation to sale?

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Q: How is the asset based valuation important in the business?

A: In case of mergers and acquisitions:: In the event that two companies are merging, or if a company…

Q: Discuss the rationale of using total assets as a basic in determining materiality.

A: The concept of materiality is fundamental to the entire audit process and is applied by auditor.  1.…

Q: What are some of the accounting applications that incorporate the time value of money into…

A:

Q: What is a capitalization rate? What are the different ways of arriving at this rate for an…

A: Capitalization rate: Capitalization rate is the projected rate of return percentage that a property…

Q: Different categories of financial assets are valued differentlyin the balance sheet. These different…

A: The objectives of the financial statements and their components are to present the actual position…

Q: In the case of the net present value technique, explain how the cost of capital is used as a…

A: The question tells about the net present value technique and  how the cost of capital is used as a…

Q: What methods could be used in profit planning?

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Discuss how the Accounting Rate of Return as an investment appraisal method is better than the Net…

A: Accounting ROR or ARR and Net Present Value(NPV) are tools that are used to make selection among…

Q: Asset-Based approach in valuation

A: Assets are the future economic benefit of the company that is sacrificed in paying off the debt and…

Q: What does the asset turnover ratio measure, and how is it calculated?

A: Profitability ratios: In general, financial ratios are used to evaluate capabilities, profitability,…

Q: What does the rate of return on total assets measure, and how is it calculated?

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Q: what is meant by Profit and Cashflow and how they are different?

A: Each and every business organization deals in either goods or offering services to their customers…

Q: What is the role of financial intermediaries in asset transformation? Briefly explain along with the…

A: Financial intermediaries are the entities involved in mobilizing the funds between two parties, one…

Q: Why might disinflation prove favorable to financial assets?

A: Disinflation is the reduction or lowering of the pace of inflation. In other words in situation of…

Q: hat situational circumstances can the Asset-based valuation be

A: Valuation is the process of determining the fair market value of a company's assets or operations.…

Q: Why is it needed to reclassify financial asset when changing business model?

A: The question is related IFRS-9 "Financial Instruments". As per IFRS 9, reclassification is allowed…

Q: In order to determine whether an investment is visible, what factors should be considered?

A: For the evaluation of a task, no fixed steps that have to be taken. Numerous things should be…

Q: Explain the significance of time value of money in financial valuation?

A: Time value of money means the value of a sum of money in future is not the same as the value of…

Q: What are the benefits of Relevant Cash-Flow Information?

A:

Q: how value drivers (Return on Equity, Net Profit Margin, and Total Asset Turnover) are related to…

A: Financial statements: Financial statements are the summary of transactions presented in the form of…

Q: What is the difference between a cash basis and an accrual basis measure of performance?

A: Cash Basis :- It is an Accounting Method where Revenue and Expense are identify at the time of…

Q: Describe the principles of asset valuation. Distinguish between the required rate of return and…

A: Asset Valuation means that a company or business is studied to understand what will be the intrinsic…

Q: lationship between Income Measurement and Asset Valuation

A: Profit or loss calculation is a simplified form of income measurement. Income is defined by an…

Q: What are the advantages of using the Dupont System to analyze the Return on Assets

A: Dupont analysis is one that helps the firm to analyze the fundamental performance of the firm. It is…

Q: Briefly discuss why research expenditure is expensed in profit or loss rather than capitalised as an…

A: Research Expenditure Research expenditures are basically the expenses incurred to a firm Company…

Q: Why is it favorable to invest in different investable assets?

A: Diversification is very important in investment to achieve the consistency.

Q: How can we determine the unit profit of operating an asset?

A: Operating income: Operating income measures the organization’s profitability (includes all incomes…