Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134067254
Author: Braun
Publisher: PEARSON
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Question
Chapter 12, Problem 8QC
To determine
That how an investment’s NPV is calculated and among given options which is the correct option.
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Please answer the following questions
1. _________________ is the discounted net future cash inflows divided by the initial cash outlay.
a.Payback
b.NRV
c.Profitability Index
d.IRR
2. __________________________ serves as a framework for measuring performance.
a.NRV
b.Payback
c.Profitability Index
d.Balanced Scorecard
3.
Which of the following is a performance measures of the balanced scorecard:
a.internal Business perspective
b.all of the answers are correct
c.financial Perspective
d.customer perspective
The accounting rate of return (also known as the unadjusted rate of return) can be calculated as: (See your Chapter 25 notes, page 2)
Initial cost of the investment divided by the annual net cash inflow
Initial cost of the investment minus the annual net cash inflow
Average amount of the investment divided by the average annual net income
Average annual net income divided by the average amount of the investment
Present value of net cash inflow divided by the initial cost of the investment
Annual net cash inflow minus the initial cost of the investment
Future value of net cash inflow divided by the initial cost of the investment
Present value of the net cash inflow minus the initial cost of the investment
After deciding the financial requirement, the finance manager should concentrate on ........................................
Select one:
A.
Mobilizing or Acquiring the Necessary Capital
B.
Cash Management
C.
Liquidity Management
D.
Investment Decision
Chapter 12 Solutions
Managerial Accounting (5th Edition)
Ch. 12 - Prob. 1QCCh. 12 - (Learning Objective 2) After identifying potential...Ch. 12 - Prob. 3QCCh. 12 - Prob. 4QCCh. 12 - Prob. 5QCCh. 12 - Prob. 6QCCh. 12 - Prob. 7QCCh. 12 - Prob. 8QCCh. 12 - Prob. 9QCCh. 12 - (Learning Objective 5) Which of the following...
Ch. 12 - Order the capital budgeting process (Learning...Ch. 12 - Prob. 12.2SECh. 12 - Prob. 12.3SECh. 12 - Prob. 12.4SECh. 12 - Prob. 12.5SECh. 12 - Prob. 12.6SECh. 12 - Prob. 12.7SECh. 12 - Prob. 12.8SECh. 12 - Prob. 12.9SECh. 12 - Prob. 12.10SECh. 12 - Prob. 12.11SECh. 12 - Prob. 12.12SECh. 12 - Prob. 12.13SECh. 12 - Prob. 12.14SECh. 12 - Prob. 12.15SECh. 12 - Identify ethical standards violated (Learning...Ch. 12 - Prob. 12.17AECh. 12 - Compute payback period and analyze changes...Ch. 12 - Prob. 12.19AECh. 12 - Prob. 12.20AECh. 12 - Prob. 12.21AECh. 12 - Prob. 12.22AECh. 12 - Calculate the payback and NPV for a sustainable...Ch. 12 - Prob. 12.24AECh. 12 - Prob. 12.25AECh. 12 - Prob. 12.26AECh. 12 - Prob. 12.27AECh. 12 - Prob. 12.28AECh. 12 - Prob. 12.29AECh. 12 - Prob. 12.30AECh. 12 - Prob. 12.31AECh. 12 - Prob. 12.32AECh. 12 - Prob. 12.33AECh. 12 - Prob. 12.34AECh. 12 - Prob. 12.35AECh. 12 - Prob. 12.36BECh. 12 - Prob. 12.37BECh. 12 - Prob. 12.38BECh. 12 - Prob. 12.39BECh. 12 - Prob. 12.40BECh. 12 - Prob. 12.41BECh. 12 - Prob. 12.42BECh. 12 - Prob. 12.43BECh. 12 - Prob. 12.44BECh. 12 - Prob. 12.45BECh. 12 - Prob. 12.46BECh. 12 - Prob. 12.47BECh. 12 - Prob. 12.48BECh. 12 - Prob. 12.49BECh. 12 - Prob. 12.50BECh. 12 - Prob. 12.51BECh. 12 - Prob. 12.52BECh. 12 - Prob. 12.53BECh. 12 - Prob. 12.54BECh. 12 - Prob. 12.55APCh. 12 - Prob. 12.56APCh. 12 - Prob. 12.57APCh. 12 - Prob. 12.58APCh. 12 - Prob. 12.59BPCh. 12 - Prob. 12.60BPCh. 12 - Evaluate an investment using all four methods...Ch. 12 - Prob. 12.62BPCh. 12 - Prob. 12.63SCCh. 12 - Discussion Questions 1. Describe the capital...Ch. 12 - Prob. 12.65ACTCh. 12 - Prob. 12.66ACTCh. 12 - Prob. 12.67ACT
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Similar questions
- Match each sentence to the correct concept. a) the amount an investment is worth after one or more time periods is referred to as............................ b) the process of finding the present value of some future amount is called.............................. c) calculating the present value of a future cash flow to determine its value today is known as....................................... d) Interest earned on the principal and may be for a number of years may be called...................................... e .................................. is the process of acculating interest in an investment over time to earn more interest. f) the interest earned on both the initial principal and the interest reinvested from prior periods is reffered to as............... ..........................arrow_forwardDefining capital investments and the capital budgeting process Match each definition with its capital budgeting method. Methods 1. Accounting rate of return 2. Internal rate of return 3. Net present value 4. Payback Definitions a. Is only concerned with the time it takes to get cash outflows returned. b. Considers operating income but not the time value of money in its analyses. c. Compares the present value of cash outflows to the present value of cash inflows to determine investment worthiness. d. The true rate of return an investment earns.arrow_forwardMatch each sentence to the correct concept. a) The amount an investment is worth after one or more time periods is referred to as_______________b) The process of finding the present value of some future amount is called_________________.c) Calculating the present value of a future cash flow to determine its value today isknown as _________________.d) Interest earned on the principal and may be for a number of years may be called______________e) ___________ is the process of accumulating interest in an investment over time toearn more interest.f) The interest earned on both the initial principal and the interest reinvested from prior periods is referred to as ______ _______.arrow_forward
- . Match each sentence to the correct concept. a) The amount an investment is worth after one or more time periods is referred to as_______________b) The process of finding the present value of some future amount is called_________________.c) Calculating the present value of a future cash flow to determine its value today isknown as _________________.d) Interest earned on the principal and maybe for a number of years may be called______________e) ___________ is the process of accumulating interest in an investment over time toearn more interest.f) The interest earned on both the initial principal and the interest reinvested fromprior periods is referred to as ______ _______.arrow_forwardIdentify the concept. a) The amount an investment is worth after one or more time periods is referred to as _______________ b) The process of finding the present value of some future amount is called _________________.c) Calculating the present value of a future cash flow to determine its value today is known as _________________.d) Interest earned on the principal and may be for a number of years may be called ______________e) ___________ is the process of accumulating interest in an investment over time to earn more interest.f) The interest earned on both the initial principal and the interest reinvested from prior periods is referred to as ______ _______.arrow_forwardPlease answer the following question. In this method, the company compares the amount spent on the investment with the discounted expected future cash inflows. a.Payback b.NRV c.Investment d.IRRarrow_forward
- As a financial manager and evaluating capital investments, one of the most difficult portions of the analysis is to predict the future cash flows. Please pick a capital investment of your choice and describe how you would develop the Free Cash Flows. Pay particular attention to describing if working capital should be included and incremental revenue/income.arrow_forwardWhich of the following are the key factors when determining asset allocation for an investment? I. Time an investor has until he needs to use the money from the investment (time horizon) II. Risk preferences (tolerance for risk) III. Current financial situation a. I., II., & III. b. I. & III. c. II. & III. d. I. & II.arrow_forwardWhich of the following items are required to analyze a capital expenditure? (Select all that apply.) - EBIT - the initial cash outlay - evaluation of the future cash flows - the projected future cash flows from the investmentarrow_forward
- Defining capital investments and the capital budgeting process Match each definition with its capital budgeting method. Methods Accounting rate of return Internal rate of return Net present value Payback Definitions It is only concerned with the time it takes to get cash outflows returned. It considers operating income but not the time value of money in its analyses. Compares the present value of cash outflows to the present value of cash inflows to determine investment worthiness. The true rate of return an investment earns.arrow_forwardWhat is the second step of capital budgeting? a. Gathering the money for the investment b. Identifying potential projects c. Getting the accountant involved d. All of the abovearrow_forwardPlease calculate investment in net working capital, net cash flows, and present value of net cash flows! Thank you!arrow_forward
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