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4 years ago

When it comes to Discounted Cash Flow (DCF) methodologies and bonds, which of the following is TRUE?

Business

1 answer:

vodomira [7]4 years ago

8 0

Answer:

[B] Using discounting, we can figure out the NPV of a bond

Explanation:

First, a similarity between Discounted Cash Flow (DCF) and Net Present Value (NPV) that is crucial to answering this question is their reliance on discounted future cash flows in determining the present value of a project.

Although, the NPC and the DCF are crucial in decision making about a future project or investment, the difference is that DCF is useful in analyzing the present value of projects future cash flow while, NPV is interested in calculating the expected net returns in the future on an investment minus the startup costs.

Since a bond is an investment, Discounting and NPV can be used to determine the present/today's value of the future returns of the bond.

Therefore, it stands to reason that the price of a bond is not entirely dependent upon the bond's NPV and at the same time the price of a bond is not entirely unrelated to the bond's NPV. NPV uses the price of the bond among other inputs such as interest and years involved to determine the present value of the future returns on the bond.

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Can success be measured

Studentka2010 [4]

Answer:

yes

Explanation:

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3 years ago

Read 2 more answers

Accounts receivable, net of the allowance for doubtful accounts is called:.

charle [14.2K]

Accounts receivable, net of the allowance for doubtful accounts is called net realizable value.

<h3>What is net realizable value?</h3>

Net realizable value is the method of knowing the value of asset that is held as inventory. The purpose of this method is to avoid overstating or understating the value of an goods in inventory.

The net realizable value is the result of deducting the costs incurred in selling the goods from its selling price.

Hence, accounts receivable, net of the allowance for doubtful accounts is called net realizable value.

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3 years ago

A company using a weighted-criteria evaluation system has established these 5 categories and the appropriate weight in parenthes

Virty [35]

The appropriate “weighted” in the weighted-criteria evaluation system is derived from the fact that the company will consider particular criteria more important than others and therefore, will give those criteria a higher possible part of the complete score.

The weighted criteria evaluation system is a valuable decision-making technique that is used to analyse program options based on particular evaluation criteria weighted by significance.

By evaluating various options based on their performance with respect to personal criteria, a value for the options can be recognized. The value for each option can be collated to generate a rank order of their performance connected to the criteria as a whole.

To learn more about weighted-criteria evaluation system here

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2 years ago

Suppose that real GDP is currently $ 13.8 trillion and potential real GDP is $ 14.0 trillion, or a gap of $ 200 billion. The gov

MAXImum [283]

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.

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3 years ago

Taylor Company received a gift of land and building from the town of Saunderstown as an inducement to relocate there. The land a

Black_prince [1.1K]

Answer:

See below

Explanation:

The donation will increase the assets and the owners' equity. Land and building are assets. An increase in assets is debited.

Donations received are equivalent to 'income' to the business. They add to equity. An increase in equity/capital accounts is credited.

The journal entry will be

Land A/c DR. $39,000

Building A/c DR.$395,000

Donations received A/c CR.$434,000

7 0

3 years ago