What is the maturity period required for an investment to qualify under the definitions of a cash equivalent?

Q: The relationship between project cash flows, taxes and inflation.

A: Cash flows is the flow of money in or out from the business. There are two types of cash flows which…

Q: Payback period is the time in which the initial cost of an investment is expected to be recovered…

A: The payback period is the time it takes to repay the cost of an investment or to reach the breakeven…

Q: What is the difference between unlevered and levered cash flows? What discount rate must be applied…

A: Hi, since you have posted two different questions, we will answer the first one, as per authoring…

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: Which is more important from a finance perspective-net income or operating cash flow? What is the…

A: Net income is calculated in the income statement whereas and operating cash flows are calculated in…

Q: The length of time required for an investment to generate cash flows sufficient to recover its…

A: Net Present Value It is the amount of present value of the cash inflows net of cash outflows. It…

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: Where is the short term investment shown in the Cash flow statement?

A: A short-term investment: It also known as a temporary investment or marketable security. It is a…

Q: Describe the process of developing cash flows for a project?

A: The project cash flow is required for the computation of NPV which further helps in analyzing the…

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: Define the concept of cash conversion cycle and what is the difference between the operating cycle…

A: Calculating and analyzing a company's operational and cash cycles over time is an excellent…

Q: What three aspects of cash flows affect the valueof any investment?

A: The cash generated over and above required by business operations and capital expenditure is called…

Q: Terminal value refers to the sum of all the net cash flows from an investment from the beginning to…

A: Given Statement, Terminal value refers to the sum of all the net cash flows from an investment from…

Q: What are the techniques for establishing cash flow equivalence with compound-interest?

A: Cash flow equivalence is established using the compound interest because investors prefer the amount…

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: Differentiate between the Loan and Project Cash Flows?

A: Loan Cash Flows:   It refers to the borrowing of unsecured nature that is used by small businesses…

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: What are the effects of Borrowing on Project Cash Flows?

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: To qualify as cash equivalents, the investment must be:

A: Cash Equivalent: Cash equivalent is highly liquid, short term investments, which could be held by a…

Q: What is the significance of the FCF (Free Cash Flow) in the area of valuation?

A: Cash flows refer to the cash expenditure and cash receipt of the business over a specific time…

Q: statements are true of long-term investments? They can be considered cash equivalents.

A: Investment: It refers to the process of using the currently held excess cash to earn profitable…

Q: On what does the interest paid on a cash investment depend?

A: Cash investment An investment (short-term) under which one makes a deposit the cash and also…

Q: How can we develop the techniques for establishing cash flow equivalence with compound-interest…

A: Answer: To measure the equivalence of the sequence of compound interest factors used to extract the…

Q: Are the revenues from the goods and services produced in the new facility, the expected future cash…

A: The question is based on the concept of calculation and components of cash inflows from new long…

Q: How would discounted cash flow be applied to fair vaue valuations?

A: Valuation of a company means to determine the intrinsic value of a company or the value which the…

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: How are incremental cash flows found in a replacement analysis?

A: The choice to substitute an existing asset with another is defined as the net current and internal…

Q: Describe the process of estimating Risky Cash Flows?

A: Process of estimating Risky Cash flows.

Q: What are the best startegy for flactuating cash flow?

A: The movement of funds into or out of a business is referred to as cash flow.Inflows are represented…

Q: Explain cash inflows from capital investments.

A: Cash inflows from Investing activities Sale or purchase of company's long term assets like fixed…

Q: What should a firm’s goal be regarding the cash conversion cycle?  Explain

A: The cash conversion cycle measures the number of days between the company making a deposit to buy…

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

A:

Q: The discount rate to be used for calculating the present value of a stream of cash flow should be…

A: Discount rate is defined as rate of the return, which helps in the computation of the future's DCF…

Q: Explain how the cash flows are structured in order to estimate thenet advantage to leasing

A: Net advantage to leasing (NAL) refers to the overall financial savings that might probably result…

Q: What is the estimated worth today of an amount of cash to be received (or paid) in the future…

A: When the amount to be paid or received in future is discounted to find its worth today, this is…

Q: How is the value of any asset whose value is based on expected future cash flows determined?

A: Answer: When there is a sequence of expected future cash flows, cash flow method is one of the best…

Q: ____ are held for the purpose of meeting short-term cash commitments rather than for investment or…

A: There are certain item of balance sheet (Current Assets) which are highly liquid can be be converted…