The time value of money is explicitly considered in Net present value (NPV) capital budgeting methods.
The process of deciding whether to invest in capital assets is known as capital budgeting. Companies can more efficiently assess and prioritize which projects, programs, and other investment assets could be the most financially advantageous in the long-term by integrating strategically planned capital budgeting into their financial processes. Internal Rate of Return, Net Present Value, Profitability Index, Accounting Rate of Return, and Payback Period are the five capital budgeting methodologies.
An investment opportunity's whole value is intended to be captured by the financial term known as Net Present Value (NPV). The goal of NPV is to forecast all potential future cash inflows and outflows related to an investment, discount each one to the present, and then tally them all up.
Learn more about capital budgeting methods here:
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Answer:
June 15
Dr. Account Receivable $24,000
Cr. Service Revenue $24,000
At the time of Receipt in July
Dr. Cash $24,000
Cr. Account Receivable $24,000
Explanation:
As the Services are performed on June 15, and Great Venture has a right to received the payment against the services provided. So, the revenue is recognized and The payment for the services has not been made yet. This result in the creation of account receivable, That is expected to receive in July.
In July the payment is received. The cash account will be debited as the cash is received and on the other hand account receivable will be credited to remove the due balance of $24,000 from receivables balance.
Answer:
The correct answer is $30,000.
Explanation:
According to the scenario, the given data are as follows:
Own investment = $20,000
Debt from bank = $10,000
As the business is sole proprietor, there is unlimited liability of the loss whether it is own investment or borrowed from a bank.
So, the total loss can be calculated as:
Total loss = Own investment + Debt from bank
= $20,000 + $10,000
= $30,000
Hence, the total loss is $30,000.
Answer:
The correct answer is B. a positive-sum game.
Explanation:
The positive sum is an expression derived from game theory that refers to a situation in which participants can cooperate and make a profit (+1), so the sum of the resulting winnings is a positive number (+ 1 + 1 = 2 or more).
A positive sum game is a scenario where agents have options capable of improving everyone at the same time. A positive sum game in everyday life is the exchange of favors, where each person can produce a great benefit to another with a small cost.
Explanation:
Part 1 : <u>True</u>, from the details provided about the movie studio total cost last year indicates after substractions of the differences in total
3rd movie cost - 2nd = 132-84 = 48 million
Therefore, the variable costs should greater than or equal to $47 million, but less than $255 million.
Part 2 : <u>False</u>, the marginal cost of producing the first movie was $45 million. And there were three movies made by the firm.
Therefore, the firm's variable costs of producing all three movies last year would be
45 x 3 = 135 million
