If any, which of the following statements is FALSE?A. NPV measures the value created by taking on an investmentB. NPV indicates how much a project will improve owner wealthC. NPV is the discounted present value of a project's expected future accounting net income at the required return, subtracting the initial investmentD. None of the above statements is false

Answers

Answer 1
Answer:

Answer:

C. NPV is the discounted present value of a project's expected future accounting net income at the required return, subtracting the initial investment.

Explanation:

NPV means Net Present Value, this is calculated by computing the present value of cash returns and not the accounting income, as accounting income takes in account non cash items also, although while computing returns the non cash transactions are not considered.

Therefore the chosen statement which states about accounting income less initial investment is false as even in case the project requires additional mid term investment then that is also considered.

Thus, false statement is

Statement C


Related Questions

Tri Fecta, a partnership, had revenues of $378,000 in its first year of operations. The partnership has not collected on $47,000 of its sales and still owes $38,700 on $235,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $28,100 in salaries. The partners invested $47,000 in the business and $26,000 was borrowed on a five-year note. The partnership paid $2,600 in interest that was the amount owed for the year and paid $8,900 for a two-year insurance policy on the first day of business. Ignore income taxes. Compute the cash balance at the end of the first year for Tri Fecta.a) $332,110.b) $161,640.c) $166,290.d) $155,440.
Suppose that your state raises its sales tax from 5 percent to 6 percent. The state revenue commissioner forecasts a 20 percent increase in sales tax revenue. Which of the following are plausible as a result of this increase in the sales tax. Is this plausible? Explain.
Engineers at New Generations Computer Company provided three design approaches for the new keyboard the company was planning to produce and sell. Designers got together and used a problem solving approach called ________, in which they analyzed each approach on its advantages, disadvantages and implications to finalize their selection.
A machine that cost $400,000 has an estimated residual value of $40,000 and an estimated useful life of four years. The company uses straight-line depreciation. Calculate its book value at the end of year 3What is the Book Value?A machine that cost $400,000 has an estimated residual value of $40,000 and an estimated useful life of 20,000 machine hours. The company uses units-of-production depreciation and ran the machine 3,000 hours in year 1, 8,000 hours in year 2, and 6,000 hours in year 3.Calculate its book value at the end of year 3.A machine that cost $400,000 has an estimated residual value of $40,000 and an estimated useful life of four years. The company uses double-declining-balance depreciation.Calculate its book value at the end of year 3.
Do you think Ford analyzed the problem of redesigning the Pinto fuel tank safety in a reasonable way? Why?

In 2019, Sheryl is claimed as a dependent on her parents' tax return. Sheryl did not provide more than half her own support. What is Sheryl's tax liability for the year in each of the following alternative circumstances? Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates, Estates and Trusts for reference. (Leave no answer blank. Enter zero if applicable.)a. She received $7,000 from a part-time job. This was her only source of income. She is 16 years old at year-end.
b. She received $7,000 of interest income from corporate bonds she received several years ago. This is her only source of income. She is 16 years old at year-end.
c. She received $7,000 of interest income from corporate bonds she received several years ago. This is her only source of income. She is 20 years old at year-end and is a full-time student. (Do not round intermediate calculations.)
d. She received $7,000 of qualified dividend income. This is her only source of income. She is 16 years old at year-end

Answers

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

Katlin Markets is debating between a levered and an unlevered capital structure. The all-equity capital structure would consist of 75,000 shares of stock. The debt and equity option would consist of 40,000 shares of stock plus $320,000 of debt with an interest rate of 6.25 percent. What is the break-even level of earnings before interest and taxes between these two options? Ignore taxes.a.$46,333.33b.$44,140.71c.$42,208.15d.$49,666.67e.$42,857.14

Answers

Answer:

e. $42,857.14

Explanation:

The computation of the break-even level of earnings before interest and taxes between these two options is shown below:

(EBIT) ÷ (Number of shares) = (EBIT - Interest) ÷ Number of shares  

(EBIT) ÷ (75,000 shares) = (EBIT - $20,000) ÷$40,000

40,000 × EBIT = 75,000 × EBIT - $1,500,000,000

35,000 × EBIT = $1,500,000,000

After solving this,  

The EBIT would be $42,857.14

The interest expense

= $320,000 × 6.25%

= $20,000

The Precision Widget Company had the following balances in their accounts at the end of the accounting period: Work-in-Process $ 5,000 Finished Goods 20,000 Cost of Goods Sold 200,000 If their manufacturing overhead was overallocated by $8,000 and Precision Widget adjusts their accounts using a proration based on total ending balances, the revised ending balance for Cost of Goods Sold would be

Answers

Answer:

$192,880

Explanation:

We need to determine the balances for each of the items.

Work in process =(5,000/225,000*100) × 8,000

= 2.2% × 8,000

= 176

Finished goods = (20,000/225,000 *100) × 8,000

= 8.9% × 8,000

= 712

Cost of goods sold = (200,000/225,000 *100) × 8,000

= 88.9% × 8,000

= 7,120

Therefore, the revised ending balance for COGS would be ;

= 200,000 - 7,120

= $192,880

According to Duffy-Deno (2003), when the price of broadband access capacity (the amount of information one can send over an Internet connection) increases 10%, commercial customers buy about 3.8% less capacity. What is the elasticity of demand for broadband access capacity for firms? Is demand at the current price inelastic?

Answers

Answer:

-Price elasticity of demand (PED )= 0.38

-The PED is less than one, therefore the demand is price inelastic.

Explanation:

Price elasticity of demand (PED) is the degree of responsiveness of quantity demanded to a unit change in the price of the product all other things being equal. This index measures the corresponding magnitude  by which quantity demand will increase, for example, if the price reduces by a given %.

Price elasticity of demand Index is interpreted as follows:

if PED greater than 1, product is elastic

if PED less that 1, product is inelastic

PED is very useful in pricing policy. For example, a product that is price elastic will accrue more revenue if the seller reduces its price and vice versa

The price elasticity of demand for a product can be computed as follows:

PED = % change in qty DD/ % change in price

So we can compute the PED for Duffy-Deno as follows:

   PED    =  3.8%/10%    

The PED is less than one, therefore the demand is price inelastic.

Final answer:

The elasticity of demand for broadband access capacity for firms is -0.38. Because the absolute value is less than 1, the demand is considered inelastic.

Explanation:

Elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, the price of broadband access increased by 10% and the quantity demanded decreased by 3.8%. This gives an elasticity of -3.8% / 10% = -0.38. Demand is considered inelastic if the absolute value is less than 1. Hence, the demand for broadband access capacity for firms is inelastic.

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Everything else the same, the higher the expected rate of inflation, _____. a. the lower the loss in purchasing power of investors
b. the higher the required rate of return on an investment
c. the lower the maturity premium required by the investors
d. the higher the money supply in the economy
e. the lower the tax rate in the economy

Answers

Answer: b. the higher the required rate of return on an investment

Explanation: Inflation is an increase in the general level of prices or in the cost of living. It is the decline in the value of money and as such it erodes the purchasing power of future cash flows or investments. All things being equal, higher inflation rates (current or expected) equates to rising yields across the yield curve. As a result, investors demand this higher yield to account for the risk of inflation. This makes option b the only option that is true and accurate.

Final answer:

The higher the expected rate of inflation, the higher the required rate of return on an investment.

Explanation:

The correct answer is b. The higher the expected rate of inflation, the higher the required rate of return on an investment. When the expected rate of inflation is high, investors require a higher rate of return to compensate for the loss in purchasing power of their money. This is because high inflation erodes the value of money over time, reducing the real return on an investment. Therefore, investors demand a higher rate of return to maintain their purchasing power.

Learn more about expected rate of inflation here:

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What is the purpose of the New Window command?It opens a new blank worksheet.
It opens one of the current worksheets into a new window.
It opens a blank workbook.
It opens a new side-by-side window of an existing workbook.

Answers

Answer:

It opens one of the current worksheets into a new window.

Answer:

It opens one of the current worksheets into a new window.

Explanation:

edge 2020 lesson-managing workbook properties

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