Answer:
(B) Leave his portfolio the way it is now
Explanation:
Bond value and market interest rates are inversely related. When the market interest rates are expected to decline and an investor already holds a bond with fixed rate of interest, the value of such bonds shall rise.
Market interest rates refer to the rate of interest other firms are offering on similarly priced bonds. Thus market interest rate also implies investor expectations i.e YTM (yield to maturity) which is used as a discounting factor to ascertain the price of a bond.
Lesser the discounting rate (yield to maturity), higher shall be the value of a bond.
Thus, it is recommended for Mr Smith to (B) leave his portfolio the way it is now.
Answer:
Which non-cash expense is added back to the net profit in the indirect method of preparing a cash flow statement? DEPRECIATION
The indirect method of preparing a cash flow statement adds a non-cash expense, such as DEPRECIATION and or AMORTIZATION, to the net profit.
Explanation:
Cash flow statement is a statement of account or financial statement prepared by firms or organisations that shows how money comes or flow into a company. It also shows the amount of money that a company receives from sales of their goods and services.
Cash flow statement also shows us the money invested my the company in outside ventures which is used for generating revenues for the company.
There are two methods of preparing Cash flow statements
a. Indirect method.
b. Direct method
The indirect method of preparing a cash flow statement involves stating the net income of the firm and then adding back non cash expenses such as Depreciation, Amortization back to the net profit. After which the determination of the actual inflow or outflow of cash from firm in carried out.
Answer:
Objective and task budgeting method
Explanation:
The objective and task method refers to a budgeting method where a business allocates a certain marketing budget in order to achieve specific objectives, instead of simply allocating a marketing budget based on percentage of sales revenues.
Doodle set its specific goals:
- increase the sales of its basic steel pins by 10%
- increase the awareness of its glow-in-the-dark pins
And then it allocated $1.5 million for marketing expenses.
The first step is determining what knowledge is most important. the control function involves measuring performance relative to the planned objectives and standards, rewarding people for well work done, and then taking corrective action when necessary.
hope this helps :)
