Answer:
Discounted cash flow(DCF).
Explanation:
This is explained to be an investment analysis model which is seen to calculate the value of investment on the basis of its future value. Thus evaluation model is seen to be discounted back to a present value in which time value of money is been used as a factor and is been put into consideration. It is also explained that investment’s worth is equal to the present value of all projected future cash flows. Cases directs us to see that boards are seen to subtract the amount spent on the investment from the present value of future cash flows to calculate the net present value of the investment. Therefore, they can easily sum how much the investment will make in today’s dollars and compare it with the cost of the investment.
Answer:
A. High
Explanation:
When an investment is considered risky, investors would demand a high rate of return as compensation for holding a risky investment.
The required rate of return is usually higher than the short term t bills rate.
I hope my answer helps you.
D. why a specific consumer made a specific choice
Answer: A - Emphasizes the external financial statements
Explanation: The characteristic of management accounting information are what makes the accounting information relevant and they include:
1. Verifiability: Management Accounting information must be verifiable that is one must be able to confirm the information on the accounts using other source documents.
2. Objectivity: Management Accounting information must be useful in decision making and planning for the future of an organisation.
3. Relevance: Management Accounting information must be reliable for decision making. The owners and decision makers must be able to rely on the information presented in the management account
4. Understandability: Management Accounting information must be understood by any user of the information presented therein. Information therein must be simple and not complex.
5. Comparability: Management Accounting information must be easy to compare with others in the same industry and also from year to year to enhance a good decision making process.
Answer:
A) The bulk of Airline A's profits came from other income which included the sale of some of its fleet.
Explanation:
Investment in favor of Airline A would severely be hindered if it is found out that the bulk of Airline A's profits came from other income which included the sale of some of its fleet.
This is because it would mean that Airline A is unable to keep up with its costs and thus is divesting its operations. Divesting is never a good sign for a firm looking to gain advantage in the future. Furthermore this explains why there was a sudden shift from loss making in the previous years to profits in the current year. A detailed inspection would be needed to eliminate uncertainty and as such any investment decisions in favor of airline A would not be justified.
Option B, C and D is efficient management and would make Airline A more lucrative for investment as it would mean management is eagerly looking to cut inefficient operations.
Option E would require more information to weaken the argument.
Hope that helps.
