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Charra [1.4K]
3 years ago
9

Which capital budgeting method uses accrual accounting, rather than net cash inflows, as a basis for calculations?

Business
2 answers:
jeka943 years ago
7 0

Answer:

Accounting Rate of Return

Explanation:

Accounting Rate of Return is the capital budgeting method that uses accrual accounting, rather than net cash inflows, as a basis for calculations.

The Accounting rate of return (ARR) capital budgeting methodology and a financial ratio which takes no recognition of time value of money. It is calculated based on the net income of the capital investment(s) proposed.

In conclusion the reason why it is argued that the Accounting Rate of Return uses accrual accounting is because the net income from the investment which is used in its appraisal, is derived based on the accrual basis since <u>such net income is recognized when earned not when received</u>

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Anastaziya [24]3 years ago
4 0

Answer:

Annual rate of return method

Explanation:

Annual rate of return method unlike some other capital budgeting techniques uses a data that is consistent with accrual concepts. the income it uses is the estimated annual net income of the entity.

Below is the formula used for  Annual rate of return method:

Annual rate of return = Estimated Annual net income/Average Investment.

It ignore the cash inflow.                                    

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Aleksandr-060686 [28]

Answer:

TRUE

Explanation:

According to Mike Peng and his book "Global Business", these indicators help to identify problems such as: principal-principal conflicts (problems between controlling shareholders and minority shareholders), expropriation and tunneling ( when managers from the controlling family divert resources for personal use or family use).

5 0
3 years ago
Bengal Co. provides the following sales forecast for the next three months: July August September Sales units 5,000 5,700 5,560
nydimaria [60]

Answer:

Total production= 5,840 units

Explanation:

Giving the following information:

Sales in units:

July= 5,000

August= 5,700

September= 5,560

The company wants to end each month with ending finished goods inventory equal to 25% of the next month's sales. The finished goods inventory on June 30 is 1,250 units.

To determine the production for August, we need to use the following structure:

Production budget:

Sales= 5,700

Desired ending inventory= (5,560*0.25)= 1,390

Beginning inventory= (1,250)

Total production= 5,840 units

7 0
4 years ago
Logan, an employee of Argon Industries, earned a salary of $60,000 in year 2. In addition, the following two transactions betwee
Mariana [72]

Answer:

$88,000

Explanation:

Calculation to determine What amount of compensation should Argon report in Logan's Form W-2 for year 2

First step is to determine the bargain element

Bargain Element=$25 per share-$10per share

Bargain Element=$15 per share

Now let determine the amount of compensation

Using this formula

Compensation=Salary earned+Taded stock+(Shares of publicly traded stock*Bargain element)

Let plug in the formula

Compensation=$60,000+$13,000+($100 shares*$15 per share)

Compensation=$60,000+$13,000+$15,000

Compensation=$88,000

Therefore the amount of compensation that Argon should report in Logan's Form W-2 for year 2 $88,000

8 0
3 years ago
The goals of Macroeconomics relate to the ______________ to achieve a balanced higher standard of living for a nation.
Setler79 [48]

Answer: Optimization of resource allocation

Explanation: Macroeconomics, in simple words, refers to the study of economy as whole. It focuses on factors, the impact of which is high on economy such as interest rates and national productivity.

One of many concerns that macroeconomics deals with is optimization of resource allocation, which means using resources in that sector which gives the best results and maximum profit to the economy.

6 0
3 years ago
A product's package, guarantees, mass-media advertising for the product, direct marketing for the product, and the selection of
jek_recluse [69]

Answer:

The correct answer is D) marketing inputs.

Explanation:

Marketing inputs: Marketing activities in the company are a direct attempt to reach, inform and persuade consumers to buy and use their products.

Input is a term applied in the field more than all economic and marketing, but basically it can be said that an input is any element that represents a fraction in the development of a product, understood as a product, everything that is produced for a given end. An input is all that material used in the manufacture of something larger, usually we associate it with the basic diet, this is because the ingredient of a food, however edible, individually, does not represent a complete food bolus, with a Standard regulation of each of its components, so it is considered as an input, as part of a whole.

8 0
3 years ago
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