Answer:
The correct answer is A)NPV would be understated.
Explanation:
NPV is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
The Salvage value is added at the end of the cash flow. So is a cash inflow.
And if we ignore salvage value the difference, the cash inflows will be smaller, so the NPV would be understated.
Answer:
False
Explanation:
While preparing the raw material budget for the period we calculate the total purchases to be made in the period concerned to meet the demand of raw material.
Demand in the period concerned = Total raw material required in production in current period + Total balance of inventory to be kept as closing inventory of current period - The opening available balance of inventory.
This is equal to the purchases to be made.
Thus, closing inventory is added and opening is deducted.
Therefore, the statement is question is not correct and is therefore, false.
Answer: b. The quantity of the country's currency supplied exceeds the quantity demanded.
Explanation:
A country operating a fixed-exchange rate system would be actively trading its currency to ensure that it remains at a certain rate. If the currency is overvalued, it means that the currency is actually weak and is being propped up by the company's actions in the forex market.
A reason for the weakness would be that the supply is higher than the demand of the currency which means that, as per the rules of supply and demand, the currency is trading at a lower price, i,e., it is weak.
Answer:
22.5 years will take to exhaust his funds
Explanation:
Consider the following calculations
- PV = 375,000, payment = -35,000, interest rate is 7.5%.
- FV = 0.
- Plugging these numbers into a calculator and solving for number of periods gives 22.5 years.