The main disadvantage of the valuation method is that the terminal value tends to dominate the total value in many cases.
In a free cash flow valuation, the intrinsic value equals present value of its free cash flow and thus, the net cash flow is left over for distribution to stockholders and debt-holders in each period.
- So, the disadvantage of the free cash flow valuation method is that the terminal value tends to dominate the total value in many cases.
Hence, the Option B is correct.
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Answer:D.None of the option is correct, the correct answer is Buy; savings=$203,000
Explanation:
The firm will Incurred the total fixed overhead it decides to make.
The total cost of making 6000 units is $163*6000=$978,000
The total cost of buying is $144*6000= $864,000 and when we deduct $89,000 to be saved from fixed overhead by buying we have a total cost of( $864,000-$89,00) =775,000.
This invariably means the company will save ($978,000-$775,000) which is equal to= $203,000 by buying.
Answer:
E. January 1, 2017
Explanation:
Financial statements are prepared showing at least two years for the sake of comparability.
It will be important for the company in presenting its financial statement using the IFRS for the year ended December 31st 2018 to show the financial statements for the year ended 31st December 2017 as if it had always applied the IFRS.
The basic idea is to show in the financial statements the effects of adopting the IFRS from a preceding period in order for the entity to show the financial statement for 2017 and 2018 and be able to compare them having been prepared on the same basis.
Thus, the transition date will be the beginning of the preceding period when the IFRS was applied (1st Jan. 2017 oe 31st Dec. 2016).
I hope this explanation makes the concept easy to grasp.
Thank you.
The answer is b. false.
In the absence of a partnership agreement on fixed duration, the Partnership Act 1890 may apply.
<span>Under the Act, a partnership will be automatically dissolved if: a partner dies</span>
<span>· </span>a partner becomes bankrupt;
<span>· </span>the court orders it to be dissolved;
<span>· </span>it's illegal to carry on the business of the partnership;
<span>· </span><span>the partnership was created meet a goal and this specific objective or the project is complete; or</span>
<span>a partner gives notice to dissolve the partnership to the other partners. The </span>
