Which are the four important investment characteristics of the project?

Q: Write the two common types of expansion decision problems in investment?

A: The two most common types of expansion decision problems in investment are: 1. Capital budgeting and…

Q: Identify two important variables to be considered when making an investment decision.

A: While Investing every investor should consider two main variables:   1) Expected rate of return 2)…

Q: Define the term the working-capital investment?

A: The working capital is known as the net working capital which is the measure of the company’s…

Q: What are the two sources of value in an investment?  Given an example of each.

A: An investment is a process where the investors gives or outlays his or her capital in return of…

Q: What is project financing? What are its advantages and disadvantages?

A: Project financing: It is a type of subsidizing for the most part foundation overwhelming,…

Q: What is the weighted average cost of capital (WACC) and its significance?

A: Weighted average cost of capital (WACC): When a firm's weighted average cost of capital (WACC) is…

Q: Describe the method used to evaluate investment projects?

A: Answer: The following are the methods are used to evaluate the investment proposals of a company.…

Q: Define the term investment pool?

A: Answer: Investment pools are noting but an institutional entities that are pooled investment…

Q: Which one of the following is an example of conventional form of investment?

A: Conventional investment categories includes trading investment options.

Q: Who is responsible for the financial evaluation of investment proposals?

A: The question is based on the concept of responsibility for the financial evaluation of investment…

Q: What is the total investment approach?

A: Total Investment Approach: In the Total Investment Approach, there is a risk-return tradeoff in the…

Q: How can we observe four important investment characteristics of the project?

A: There are four features of investment: The asset that was bought. The cash flow generated by the…

Q: Define each of the following terms:g. Project financing; securitization

A: Project Financing- 1. It is a long term financing scheme for a group of investors, namely equity…

Q: Investment projects fall within two types. What are they?

A: An investment project is a series of cash inflows and outpourings, normally beginning with a money…

Q: What are the three types of project risk?

A: Answer: Investor risk means that an investment’s future return may not be same as anticipated. So,…

Q: Describe the concept applied to the creation of an investment project portfolio?

A: The question is based on the concept of creation of portfolio for investment , which is combination…

Q: How is the project profitability index computed, and what does it measure?

A: Profitability Index Profitability index is define as the ratio of net present value of cash inflow…

Q: Explain the problem of a capital-investment?

A: For the financing of capital investment, generally, the company considers operating cash flow of its…

Q: Explain Estimating Development Cost and Interest Carry?

A: INTRODUCTION Estimating development cost in project management is the process of forecasting the…

Q: How can we consider the information for a typical investment project with a service life?

A: Computation of the interest rate can be done by considering the information available for the…

Q: What is project financing?

A: Project financing is an opportunity to finance long-term, nil, or restricted capital accessible to a…

Q: Describe the Investment-Pool Concept?

A: Investment pools are institutional elements that are pooled speculation structures, with the…

Q: When is a project is said to be a net investment?

A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…

Q: What is the main determinant of the level of investment?

A: An investment is simply a financial instrument formed with the goal of allowing money to grow. One,…

Q: What do we mean by the economic life of a project?

A: The time span for which an asset or a project generates profits for the owner is known as the…

Q: Discuss the factors that must be considered in choosing the means of financing a project

A: Project financing is a means of obtaining funds for industrial projects, long-term infrastructure,…

Q: What do we call the cost of capital at which the two projects have the same NPV?

A: The term cost of capital refers to the cost that the company incurs in raising capital from…

Q: What it the profitability index for investment project O?

A: Profitability Index = Present Value of cash flows / Initial investment  =$102,500 / $95,000 =1.079

Q: Which is the single most important criterion for investment decisions?

A: NPV computes the existing value of future benefits by discounting future cash flows with a given…

Q: Describe the process of Incremental-Investment Analysis?

A: The question is based on the concept of Incremental analysis, the method is a problem-solving…

Q: What are the main constraints or obstacles to implementing the investment management concept?

A: Investment management refers to the management of assets of an individual by the firm. It will…

Q: Our range of investment choices-and their relative risk factors-may be classified into three types…

A: While choosing to make an investment decision, the main area of focus is their risk-return…

Q: Describe the investment analysis?

A: Investment analysis is defined as the process of evaluating an investment for income, risk, and…

Q: Define the term capital investment.

A: Capital investment analysis: Capital investment analysis is the process by which management plans,…

Q: How capital expenditure(investment) analysis helps in focusing particular projects and program ?

A: Expenditure in the company can be divided into two parts. Revenue expenditures:- expenditure…

Q: Name the three of the most basic tools for assessing project risk?

A: The project risk is an unpredictable occurrence or situation that has an effect on at least one…

Q: Describe the concept of rate of return based on the return on invested capital in terms of a…

A: The term ROIC is used to calculate the profitability or return on invested capital that a business…

Q: Among the six types of investment, which is the hardest to acquire? Why?

A: Investing is the process of allocating resources, usually money, in the hopes of making a profit or…

Q: What are investment activities? Give some examples?

A: Statement of cash flow: It refers to a financial statement that shows all the cash payments and…

Q: Define the term elements associated with investment activities?

A: In a simple language investment is like investing money to get a return out of it or to get more…

Q: Explain Financing Project Development?

A: Introduction  Project finance refers to the funding of long-term projects, such as public…

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.