What is the best-case scenario?

Q: Define the Base Case and the Proposed Alternatives?

A: The base case is the output expected from the basic assumption made by the project team. The basic…

Q: What is the risk of Incorrect Rejection?

A: Risk of incorrect acceptance of internal control reliability and risk of incorrect acceptance of…

Q: which alternative is the best choice?

A: Time value of money(TVM) means that the amount of money received in the present period will have…

Q: Why is it crucial to estimate the MARR correctly?

A: It is the minimum return rate on the project which an entity computes prior to the staring of the…

Q: What is Scenario Analysis?

A: Scenario analysis is an important step in the financial modelling. This is used to show the possible…

Q: How does the decision-maker use the scenario analysis?

A: Scenario analysis helps investors and analysts in making better decisions.

Q: eristics?

A: Step 1   Risk is defined as an occurrence that harms financial performance and/or reputation as a…

Q: What is the going concern assumption?

A: Going concern Assumption: On the basis of Going concern assumption Financial statements are…

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: What is the Aggregating Risk over Time?

A: Aggregating Risk over time is the measure of a solitary customer's presentation of a foundation or…

Q: What is IFRS?

A: In accounting and financial reporting there is need of international rules and regulations to create…

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: What Does RiskReally Mean?

A: Risk: Risk can be defined as upcoming uncertainty about variation from anticipated earnings or…

Q: What types of information must be considered when it comes to risk and return?

A: Risk and return go hand in hand both are related to each other.There is direct correlation between…

Q: What is event risk?

A: Event risk is the likelihood of a sudden event adversely affecting an organization, industry, or…

Q: What is option?

A: Options are the derivatives contract that gives investor discretion to sell or buy the assets like…

Q: What is the definition of "FMS option"?

A: Stock Option: An investor who purchases a stock option has the right, but not the responsibility, to…

Q: What are the Replacement decisions?

A: Cost:   It is the economic value of resources incurred by a firm to manufacture a product or render…

Q: What is the FMS option?

A: FMS: Flexible manufacturing system

Q: Explain political risk

A: Political risks are important to be considered because they have an impact on the profitability…

Q: What three techniques are used to assess stand-alone risk?

A: Stand-alone risk: Stand-alone risk is the risk related with the anticipated project cash flow. The…

Q: What is the risk of Incorrect Acceptance?

A: Risk of incorrect acceptance: The risk that the sample selected by the auditor may show that there…

Q: What are some types of real options?

A: Real options is defined as a capital budgeting decision with which the management may make a future…

Q: Which of the above should be chosen?

A: Net Present Value (NPV) NPV (Net present value) is a capital budgeting technique used to evaluate…

Q: What is the payback screening?

A: Payback method: Payback period is the expected time period which is required to recover the cost of…

Q: Calculate the risk neutral probability

A: Risk neutral probability = (er*Δt - d)/(u-d) r is risk free rate. Δt is time period between each…

Q: Define uncertainity ?

A: "Uncertainty" in accounting refers to the difficulty of predicting outcomes because of limited or…

Q: What does a project’s stand-alone risk reflect?

A: Stand alone risks are risks that are associated with a particular asset or a project. Companies when…

Q: Define risk

A: Risk can be defined as whenever there are chances that the investments’ actual outcomes are…

Q: Define the term risk?

A: Types of risk: Investment risk Market risk Inflation risk Business risk Liquidity risk

Q: What is the Allowable Risk of Over-reliance?

A: Auditor has to test the account balances and classes of transactions and has to do both control…

Q: Explain relevant risk

A: Introduction: Risk can be characterised in terms of the uncertainty of future consequences resulting…

Q: What is a real option?

A: Real option It may be a selection made open to a firm's supervisors approximately the commerce…

Q: What steps would be involved?

A: Arbitrage is the strategy applied by the investor to take the benefit of mispricing, at various…

Q: In what situation should you MAKE?

A: Make or Buy: Make or Buy decision are normal condition arises in front of management due to…

Q: What is the decision rule for ARR?

A: Accounting rate of return refers to rate of profit earned on an investment. The ARR is computed by…

Q: What is the replacement analysis?

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

Q: What risk does Beta measure?

A: There are two types of risks: 1) Systematic risk 2) Unsystematic risk 1. Systematic risk : It is…

Q: What is a feasibility study?

A: Feasibility study is a scientific program. Venture achievement proportion  is decided by Project…

Q: What are going-concern uncertainties?

A:

Q: What advantage does scenario analysis have over sensitivityanalysis?

A: In finance, we are required to analyze the change in value of one variable over the change in the…

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…

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.