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3 years ago

If Management was not concerned with the time value of money, from which two capital budgeting methods should they choose?

Business

1 answer:

Neporo4naja [7]3 years ago

7 0

Answer:

ARR or Payback

Explanation:

Here are the options to this question

Multiple Choice

BET or IRR

ARR or Payback

NPV or IRR

NPV or Payback

BET or NPV

Accounting rate of return = Average net income / Average book value

Average book value = (cost of equipment - salvage value) / 2

Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows

Payback period = Amount invested / cash flow

The NPV and IRR considers the time value of money by discounting the cash flow at discount rate.

Net present value is the present value of after tax cash flows from an investment less the amount invested.

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

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Assume that you manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 27%. The T-bill rate

Mice21 [21]

Answer:

The slope of the CML = (13% - 7%)/25% = 0.24

Explanation:

Given that:

expected rate of return of 17%

standard deviation of 27%.

The T-bill rate is 7%.

You estimate that a passive portfolio invested to mimic the S&P 500 stock index yields an expected rate of return of 13% with a standard deviation of 25%.

The slope of the CML is

Slope of the CML = (Expected return of Market - Risk free return)/Standard deviation of market

The slope of the CML = (13% - 7%)/25% = 0.24

= (0.13 - 0.07) /0.25

= 0.24

8 0

3 years ago

In the context of performance management, which term refers to a measure that obtains consistency of results over time?

kherson [118]

Test retest reliability

The performance management,term refers to a measure that obtains consistency of results over time.

It also carries the idea of performance appraisal through which more work can be achieved by rewarding the personnel who achieve their targets on time and show their results.

It helps optimize the performance to obtain consistency over the time with providing feedback and improvement in the performance. Psychometrics tests and evaluation test are used for improvement of employee performance. Several policies and procedures are also implemented for their welfare.

To learn more about performance management here,

brainly.com/question/16927603

#SPJ4

5 0

1 year ago

Which of the following is not possible when recording a transaction?A. Liabilities increase and assets decrease.B. Stockholders'

Basile [38]

Answer:

Liabilities increase and assets decrease.

Hope this helps!

3 0

3 years ago

The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Balance Sheet Sales $23,500 Assets $12

finlep [7]

Answer:

$20,370.5

Explanation:

Net Profit Margin = Net Profit / Sales= 5,168 / 23500 = 0.219915 = 21.99%

Dividend Payout Ratio = Dividends / Net profit = $1,560/$5,168 = 0.3018576 = 30.19%

Increase in Assets = Total Assets / Current Sales * Change in Sales

Increase in Assets = 121,000 /23,500 * (28,300-23,500)

Increase in Assets = 5.1489362 * 4800

Increase in Assets = $24714.89

Increase in Current Liabilities = Current Liabilities / Current Sales * Change in Sales = 0

Earnings Retained = Revised sales * Net profit margin * (1- dividend payout ratio)

Earnings Retained = $28,300 * 21.99% * (1 - 30.19%)

Earnings Retained = $28,300 * 0.2199 * 0.6981

Earnings Retained = $4344.39497

Earnings Retained = $4344.39

External Financing Needed = Increase in Assets - Increase in Current Liabilities - Earnings Retained

External Financing Needed = $24714.89 - $0 - $4344.39

External Financing Needed = $20,370.5

7 0

2 years ago

After reviewing the reports of long-term changes in the macroenvironment, you must pick one element that you think Gerlach shoul

Elina [12.6K]

Answer:

Demographic Environment

Explanation:

When looking at the macroenvironmet and the likely changes happening in there, one seems to look at the broader condition of the economy which can be impacted by the monetary and fiscal policies, as well as employment and inflation rates.

The demographic environment is part of the six forces of the microenvironment and should be considered first amongst the three items listed. With this, a company can be able to identify the exact target markets needed for their respective products or services .

7 0

3 years ago