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lawyer [7]
2 years ago
9

A company acquires a rather large investment in another corporation. What criteria determine whether the investor should apply t

he equity method of accounting to this investment?
Business
1 answer:
kondaur [170]2 years ago
8 0

Answer:

Explained below:

Explanation:

The equity method of accounting is the method of producing investments in other companies. If a company invests in another corporation and holds 20 to 50 % share of the particular corporation and hence has a notable impact on the latter's administration then the investor (company) should apply the equity method of accounting to this investment and reports such investments on its balance sheet as an asset..

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Average Accounting Return. Concerning AAR:a. Describe how the average accounting return is usually calculated and describe the i
evablogger [386]

Answer:

a. Describe how the average accounting return is usually calculated and describe the information this measure provides about a sequence of cash flows. What is the AAR criterion decision rule?

Average accounting return = average net income / average investment

The problem with AAR is that net cash flows are not equal to net income since depreciation expense and changes in net working capital are not accounted for by AAR.

The criterion decision rule is that projects with an AAR above a certain measure.

b. What are the problems associated with using the AAR as a means of evaluating a project’s cash flows? What underlying feature of AAR is most troubling to you from a financial perspective? Does the AAR have any redeeming qualities?

it doesn't consider net cash flows, nor time value of money. Personally, accounting is an extremely important tool but it only reflects a partial perspective of a business. E.g. a business might have a huge net income but if it doesn't have enough cash to function, it will go bankrupt. In finance, cash is king.

Personally, my biggest problem with AAR is that it doesn't consider net cash flows. I've been on situations where the company I worked for was apparently doing great, but our accounts receivables were huge and we couldn't collect money fast enough. My job was basically go to different banks and convince them of loaning us cash. The worst part was that even without being able to collect cash, we still had to pay taxes and that was another huge problem.

I believe that AAR is still used because of its simplicity. Also, taxes are paid based on accounting profits and many firms base they compensation plans on them.

8 0
3 years ago
Many customers value fast, fresh, flavorful food that is free of preservatives, chemicals, and antibiotics. The marketing mix fa
Dennis_Churaev [7]

The marketing mix factor that represents the value of the product to a customer is price.

<h3>What is marketing mix?</h3>

Marketing mix simply means the elements that are involved in the marketing of a good. They're product, price, place, and promotion.

In this case, the marketing mix illustrated is price since it deals with the value of the product.

Learn more about marketing mix on:

brainly.com/question/14037774

5 0
2 years ago
which of the following should be avoided when solving a problem? A) Assessing B)Compromising C) Procrastinating D) Projecting
nexus9112 [7]
Procrastinating and that’s the answer
7 0
3 years ago
Trial courts determine if a will is valid or not. O True O False​
andreyandreev [35.5K]

Answer:

A valid will has to be in writing, and signed by the testator in the presence of two witnesses, who must also attest the will. If the process is not followed to the hilt, the will can be challenged in the court of law. So the answer is true.

8 0
3 years ago
Review the scenario:
ankoles [38]

Answer:

w4

Explanation:

because its w4 because it explains its his first day on the job

4 0
3 years ago
Read 2 more answers
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