Which of the following statements is not true as regards to matching strategy? a. all assets should be financed with permanent long-term capital. b. temporary current assets should be financed with temporary working capital c. permanent current assets should be financed with permanent working capital. d. long-term assets should be financed from long-term capital.

Q: Which of the following statement is   true?   O a. Sunk cost is not relevant in   capital…

A: Capital budgeting decisions are used to evaluate new projects, opportunities, and investments such…

Q: True or False In the net present value method, market research costs incurred in the past should be…

A: An investment appraisal depicts a financial analysis of a capital project that requires a huge…

Q: Capital budgeting is the decision making process used in the acquisition of long term physical…

A: It is a decision making process which is used by the firm about the acquisition of long term…

Q: Which of the following statements is true regarding capitalization of interest? O When excess…

A: The cost of borrowing to acquire or build a long-term asset is referred to as capitalized interest.…

Q: How can we determine the period necessary to recover both the capitalinvestment and the cost of…

A: The Payback period (PBP) determines how long it would take a company to recover the investment. PBP…

Q: A conservatively financed firm would: A. use long-term financing for all fixed assets and short-…

A: Finance company is referred to as an organization, which used to make the loans to the businesses as…

Q: Identify the incorrect statement in connection to working capital management:       A.…

A: A business organization needs to manage its working capital for the smooth functioning of its…

Q: The methods of evaluating capital investment proposals can be grouped into two general categories…

A: Capital budgeting is used to evaluate the projects. With the help of capital budgeting, the…

Q: Which of the following is NOT considered a finance activity?     Operations management assessment…

A: A company or a firm works with the combined efforts of all the departments of a firm. The different…

Q: In order to calculate the cost of a long-term asset that is financed with long-term debt, present…

A: Given a certain rate of return, present value (PV) is the current value of a future sum of money or…

Q: Which of the following should NOT be included as a cash flow in initial, operating or terminal cash…

A: There are various different costs associated while taking a capital budgeting decision.

Q: The most appropriate financing pattern would be one in which asset buildup and length of financing…

A: The availability of the best combination of finance is referred to as the financial pattern. The…

Q: MULTIPLE CHOICE Which is not considered as cash outflows or costs for purposes of determining net…

A: Initial cash outflow shows the initial cash outlay in purchasing asset or starting any project Any…

Q: One of the following methods are not a method to evaluate projects: Return on investment Discounted…

A: Capital budgeting: It implies to the process of evaluating different projects based on their…

Q: A project is rejected under the net present value method when: a. The percentage return is greater…

A: Capital budgeting is a process used to gauge if an investment should be made in a particular project…

Q: Which of the following is NOTa relevant cash flow and thus should not be reflected in the analysis…

A: Sunk cost is the cost that has been incurred and it would not be recovered in future. It depends on…

Q: Which of the following methods of capital budgeting indicates the time period required to recover…

A: Capital budgeting is a process of identifying high return project or projects which will increase…

Q: How should research and development expenditure be dealt with in an entity's financial statements?…

A: The accounting for research and development involves those activities that create or improve…

Q: In computing the present value of an investment in equipment, the present value of the residual…

A: Net Present value = Present value of future cash flows + Present value of terminal cash flow -…

Q: Which of the following is correct about subsequent measurement of financial asset at fair value? a.…

A: Fair value through other comprehensive income-financial assets are classified and measured at fair…

Q: Which of the following is the most reliable method for making capital budgeting decisions? a. ARR…

A:

Q: capital projects

A: Option A is wrong because the establishment of a ranking procedure based on quantitative criteria…

Q: Which of the following statements best describes the difference between the IRR method and the MIRR…

A: Note: As per the policy, we are supposed to solve one question at a time. Kindly repost the further…

Q: Which of the following is not a reason for risk and uncertainty in capital budgeting? a. Decisions…

A: Capital Budgeting decision are based on various factors

Q: Identify which one of the following is not the importance of capital market? a. Effective…

A: Capital markets are very important for countries to grow business and mobilize money.

Q: Capital investment decisions involve investments in long-term operational assets.  TRUE OR FALSE?

A: Capital investment decision: These decisions are made by the management to utilise the capital funds…

Q: The most appropriate financing pattern would be one in which asset buildup and length of financing…

A: Financial planner is referred to as an individual, who is the professional as well as helps in…

Q: Capital Budgeting is acquiring inputs with long term returns. Which of the following author gave the…

A: Capital budgeting is the process that a business uses to determine which proposed fixed asset…

Q: When we use the AFN equation to forecast the additional funds needed (AFN), we are implicitly…

A: Additional fund needed is the funding that company would require for coming year based on the sales…

Q: What are some advantages of matching the maturities of claims against assets with the lives of…

A: Whenever something is going to give benefit in future, it is known as asset. The amount which is…

Q: Which of the following is an advantage of Net present value? a. Investment potential ignored b.…

A: Net present value (NPV): The net present value is a technique used for making the investment…

Q: Which of the following is NOT correct regarding the rate of return on assets? a. The rate of…

A: Return on assets measures the profitability of a company relative to its assets. Return on assets =…

Q: If the key ratios are expected to remain constant, the AFN equation can be used toforecast the need…

A: Many times there are situations arise where the key ratios of the company remain constant in such a…

Q: Which of the following are the key factors when determining asset allocation for an investment? I.…

A: Asset allocation can be defined as the strategy which involves allotment of assets of portfolio of…

Q: The funds requirement can be forecasted by theforecasted financial statement approach, but youcould…

A: Additional funds required (AFN) is that the quantity of cash a corporation should raise from…

Q: Critically evaluate the benefits and limitations of each of the different investment appraisal…

A: when evaluating the investment appraisal techniques it is important to understand its benefit as…

Q: Which of the following statements is true with regard to cash flows resulting from financing costs?…

A: Financing cost: In the context of borrowing money, financing costs are defined as the interest and…

Q: The acquisition of capital assets by an internal service fund would be shown as: O a expense Ob.…

A: b . Long Term Asset Internal service fund is a type of a proprietary fund in which  acquisition…

Q: Maturity matching approach means that permanent assets and temporary assets will be finance with the…

A: Maturity matching approach is strategy of working capital requirements that short term requirements…

Q: When a capital investment is expected to provide unequal annual cash inflows, the payback period…

A: Payback period: It can be defined as the time that investment takes before it starts generating…

Q: Which of the following is considered not a Capital expenditure? a. Training costs b. Delivery costs…

A: Lets understand the basics. As per IAS 16 "Property, plant and equipment", initial cost for PPE…

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.