Which method would be more consistent with the matching principle? Why?

Q: Which Variable Is most critical in Sensitivity Analysis?

A: Sensitivity analysis helps to analyze the project by considering different variables. It helps…

Q: In general terms, how does IFRS for SMEs differ from full IFRS?

A: International Financial Reporting Standards:   IFRS (International Financial Reporting Standards) is…

Q: Describe about the DVL methods and what are its advantages?

A: Dollar-value-LIFO: This method shows all the inventory figures at a dollar price rather than units.…

Q: Explain the call-put parity relation and how it is justified?

A: call-put parity relation 1. It shows the prices of calls and puts , consistency of underlying…

Q: Explain Matching Principles?

A: Matching concept is an accounting principle which explains the need to match revenue with the…

Q: Explain why NPV is the best criterion and how it overcomes problems inherent in the other methods.

A: The "value derived from the use of money over time as a consequence of investment and reinvestment"…

Q: What assumptions underlie the EOQ model?

A: The model that helps in calculating the optimal amount of quantity needs to be purchase for…

Q: How to choose a Benchmark?

A: Investors select a market index (or a mix of indices) as the portfolio's benchmark. An index…

Q: Describe the Sensitivity Analysis for Mutually Exclusive Alternatives?

A: Sensitivity analysis portrays how various values of an independent factor under a given arrangement…

Q: Which method is more efficient to obtain an equivalence?

A: Answer: The concept of equivalence tends to compare the cash flows in such a way that two…

Q: Describe the method for conducting sensitivity analysis for mutually exclusive alternatives?

A: Sensitivity analysis is a financial model that decides how target factors are influenced by changes…

Q: Describe the Sensitivity Analysis method performed for Mutually Exclusive Alternatives?

A: Sensitivity analysis is a financial model that decides how target factors are influenced by changes…

Q: Why is the NPV preferred over the IRR?

A: Net Present Value is a method of finding the profitability of a project by discounting future cash…

Q: Explain the drawbacks of IRR over MIRR with example?

A: Capital budgeting is part of investment decisions. Business firms consider capital budgeting in…

Q: The matching principle

A: Financial Accounting:   It refers to the process of recording the financial transactions of the…

Q: ain the correct answer too.. and why others mismatch?

A: Contra accounts are related  to another associated general ledger account . The contra account…

Q: How does the use of scenarios differ from sensitivity analysis?

A: Sensitivity analysis and scenario analysis are the assessment techniques that are used in investment…

Q: Which method is a more efficient way to obtain an equivalence?

A: Equivalence helps to equate the cash flows in such a manner that two cash flows occurring at…

Q: What are some factors thatmight lead to synergy?

A: Introduction: When two companies combine and raise the valuation of the new firms and thereby…

Q: How are Sensitivty Analysis and Scenario Analysis different in details?

A: Sensitivity analysis is the evaluation of the impact on the project when there may be a few…

Q: Which of the following statement is correct?

A: Pecking Order Theory: As per this theory, the preference for sources for funds is first retained…

Q: Define Covariance?

A: Portfolio management is a dynamic decision making process about investment. It is a continuous…

Q: Describe the fundamentals of Replacement-Analysis?

A: Replacement analysis is the process where it is determined whether it would be beneficial to replace…

Q: What are the Replacement-Analysis Fundamentals?

A: Replacement analysis refers to the process where an organization determines whether it is beneficial…

Q: Which of the following are substantive tests?

A: For identifying whether the following are substantive tests or not we need to first identify what is…

Q: Which answer is correct and why?

A: Under average cost method, average cost per unit is calculated as: = Total cost of opening inventory…

Q: What is the DCF method?

A: DCF is a complex tool for valuation which approximates the value of any investment depending upon…

Q: Give an example of a Sensitivity Analysis performed for Mutually Exclusive Alternatives?

A: Mutually exclusive alternatives are those alternatives out of which only one can be selected at a…

Q: If you wanted to evaluate a firm’s DSO, with what could you compare it?

A: DSO is the number of days that firms take to convert their account receivables into cash.

Q: What is multiple discriminant analysis?

A: Multiple discriminant analysis (MDA) is a statistical method used by many financial planners to…

Q: Define the term the matching principle?

A: Matching concept is an accounting principle which explains the need to match revenue with the…

Q: What is the decision rule for IRR?

A:

Q: illustrate with an example how can we determine the IRR?

A: IRR is a method that tells the company how much returns the company will earn on the amount spent on…

Q: What is the replacement analysis?

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

Q: What is the confirmation process?

A: Confirmation Process: Confirmation process refers to the process for the authentication of the…

Q: Explain Variation on the Preferred IRR and IRR Lookback?

A: The internal rate of return (IRR) is the measure used in the financial analysis of an investment…

Q: What is sensitivity analysis and its functions?

A: The answer for the theory question on sensitivity analysis and its functions is discussed hereunder…

Q: Why are the realization and matching principles important? Only the importance

A: Accounting principles: These are the assumption, concepts, and guidelines necessary to prepare and…

Q: Explain the Relationship to the PW Analysis?

A: The question is based on the concept of present worth analysis of a project or cash flows.

Q: What are the types of fundamental analysis?

A: Fundamental analysis basics is the analyzing method used to evaluate the intrinsic value of stocks…

Q: Why are the realization and matching principles important?

A: Accounting principles: These are the assumption, concepts, and guidelines necessary to prepare and…

Q: What is the definition of the phrase Sensitivity Analysis?

A: The Answer