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liubo4ka [24]
3 years ago
11

One of the draw backs of the profitablity index as a criteria for judging whether to accept a capital investment project is that

:_______
Business
1 answer:
Naya [18.7K]3 years ago
3 0

Answer:

It might lead to over-optimistic projections

Explanation:

In simple words, the problem with using profitability index as the index criteria lies with the procedure of estimating it. In order to consider the business situation, the organisational finance group requires to settle with the corporation supervisors.

Leadership may be too enthusiastic about their assignment, so forecasts for cash flow may be too substantial. Consequently, in predicting the profitability index, there may be an uptrend prejudice.

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On March 31, 2021, Chow Brothers, Inc., bought 8% of KT Manufacturing’s capital stock for $51.5 million. KT’s net income for the
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Answer and Explanation:

a. The Journal entries are shown below:-

Investment - Capital stock Dr, $51.5 million

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(Being investment is recorded)

Unrealized holding gain or loss Dr, $15.5 million ($51.5 - $36.0)

         To Fair value adjustment $15.5 million

(Being fair value adjustment is recorded)

b. Unrealized holding gain or loss Dr, $5.5 million ($51.5 - $30.5 - $15.5)

        To Fair value adjustment $5.5 million

(Being fair value adjustment before sale is recorded)

Cash Dr, $30.5 million

Unrealized holding gain or loss Dr, $21 million

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(Being sale of investment is recorded)

4 0
3 years ago
Revenue expenditures
solmaris [256]

Answer:

Answer A

Explanation:

Revenue expenditures are the expenditures during period in which the asset has been put into its usage. They are often discussed in the context of fixed assets. For instance if a company installs new equipment and has monthly costs of its maintenance, these costs are revenue expenditures. Therefore, they only present additional costs that do not necessarily increase asset's life.

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Which strategy is an effective way to manage risk? A. documenting and sharing risk management procedures B. renouncing changes i
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A

Explanation:

5 0
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It is called deposit.
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