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2 years ago

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The expenditure on a fixed asset (such as a machine) or monetary asset (such as shares or bonds) that affects the net cash flow

is called

1 answer:

pishuonlain [190]2 years ago

3 0

Answer:

Capital expenditure is the answer.

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A. Finance, or financial management, requires the knowledge and precise use of the language of the field.

Sergio [31]

Answer:

1. Amortization Schedule.

2. Amortized loan.

3. Annual Percentage rate.

4. Discounting.

5. Future Value.

6. Opportunity cost of funds.

7. Time value of money.

8. Annuity due.

9. Perpetuity.

10. Ordinary annuity.

11. PMT/r.

Explanation:

Financial accounting is an accounting technique used for analyzing, summarizing and reporting of financial transactions like sales costs, purchase costs, payables and receivables of an organization using standard financial guidelines such as Generally Accepted Accounting Principles (GAAP).

Some of the financial terminologies used in financial accounting are;

1. <u>Amortization Schedule</u>: A schedule or table that reports the amount of principal and the amount of interest that make up each payment made to repay a loan by the end of its regular term.

2. <u>Amortized loan</u>: A loan in which the payments include interest as well as loan principal.

3. <u>Annual Percentage rate</u>: A value that represents the interest paid by borrowers or earned by lenders, expressed as a percentage of the amount borrowed or invested over a 12-month period.

4. <u>Discounting</u>: A process that involves calculating the current value of a future cash flow or series of cash flows based on a certain interest rate.

5. <u>Future Value</u>: The name given to the amount to which a cash flow, or a series of cash flows, will grow over a given period of time when compounded at a given rate of interest.

6. <u>Opportunity cost of funds</u>: A 6% return that you could have earned if you had made a particular investment.

7. <u>Time value of money</u>: A concept that maintains that the owner of a cash flow will value it differently, depending on when it occurs.

8. <u>Annuity due</u>: A series of equal cash flows that occur at the beginning of each of the equally spaced intervals (such as daily, monthly, quarterly, and so on).

9. <u>Perpetuity</u>: A cash flow stream that is generated by a share of preferred stock that is expected to pay dividends every quarter indefinitely.

10. <u>Ordinary annuity</u>: A series of equal cash flows that occur at the end of each of the equally spaced intervals (such as daily, monthly, quarterly, and so on).

11. Time value of money calculations can be solved using a mathematical equation, a financial calculator, or a spreadsheet. The equation which can be used to solve for the present value of a perpetuity is given below;

Present value of a perpetuity (PV) = PMT/r

Where;

PMT represents the payment amount.
r represents the annual interest rate.

3 0

2 years ago

Analyze and describe how the fluctuating global market, organizational structure, and the technology revolution have impacted th

Lesechka [4]

<span>One result of the global economy is that trade between the United States and other countries has decreased. </span>

3 0

3 years ago

Commenced business with cash of Rs 20,000 and Goods worth Rs 25,000

nevsk [136]

Explanation:

$\sf \green{25000 - 20000 = \longrightarrow 5000}$

7 0

2 years ago

Your friend brought up an investment opportunity that will generate cash flows of $5,000, $5,300, and $6,000 next three years, r

ahrayia [7]

Answer:

The most I could pay for the investment is $12,960.09

Explanation:

The maximum a rational investor could pay acquire an investment is the present value of all future cash flows receivable from the investment.

In the case, the present of all cash flows is calculated thus:

Years Cashflows [email protected] 12% PV

1 5000 0.892857143 4,464.29

2 5300 0.797193878 4,225.13

3 6000 0.711780248 4,270.68

Total of present values 12,960.09

The discounting factor is calculated using the formula :

1/(1+r)^n where r and n are rate and number of years respectively.

8 0

3 years ago

Your company, which has a MARR of 12%, is considering the following two investment alternatives:

mote1985 [20]

Answer:

future worth:

project A 11,615.26

project B 12,139.18‬

It should choose project B as their future value is greater

IRR of project A: 13.54%

We should remember that the IRR is the rate at which the net value is zero thus, equals the inflow with the cash outlay

It is calculate with excel or financial calculator due to the complex of the formula.

Explanation:

Project A

We calculate the future value of the cash flow per year and cost as we are asked for future value. The salvage value is already at the end of the project life so we don't adjust it.

Revenues future value

$C \times \frac{(1+r)^{time} -1}{rate} = FV\\$

C 15,000

time 8

rate 0.12

$15000 \times \frac{(1+0.12)^{8} -1}{0.12} = FV\\$

FV $184,495.3970

Expenses future value

$C \times \frac{(1+r)^{time} -1}{rate} = FV\\$

C 3,000

time 10

rate 0.12

$3000 \times \frac{(1+0.12)^{10} -1}{0.12} = FV\\$

FV $52,646.2052

Cost future value

$Principal \: (1+ r)^{time} = Amount$

Principal 40,000.00

time 10.00

rate 0.12000

$40000 \: (1+ 0.12)^{10} = Amount$

Amount 124,233.93

Net future worth:

-124,233.93 cost - 52,646.21 expenses + 184,495.40 revenues + 4,000 salvage value

future worth 11,615.26

Project B

cost:

$Principal \: (1+ r)^{time} = Amount$

Principal 60,000.00

time 10.00

rate 0.12000

$60000 \: (1+ 0.12)^{10} = Amount$

Amount 186,350.89

expenses 52,646.21 (same as previous)

revenues

$C \times \frac{(1+r)^{time} }{rate} = FV\\$

C 24,000

time 7

rate 0.12

$24000 \times \frac{(1+0.12)^{7} -1}{0.12} = FV\\$

FV $242,136.2815

TOTAL

242,136.28 + 9,000 - 52,646.21 - 186,350.89 = 12,139.18‬

Internal rate of return of project A

we write the time and cash flow for each period.

Time Cash flow

0 -40,000

1 -3,000

2 -3,000

3 12,000

4 12,000

5 12,000

6 12,000

7 12,000

8 12,000

9 12,000

10 16,000

IRR 13.54%

Then we write on excel the function =IRR(select the cashflow)

and we got the IRR of the project

6 0

3 years ago