• A financial asset is considered to have value if it has the ability to generate positive cash flows. • A financial asset is considered to have value if it is acquired at its market value • A financial asset is considered to have value if it is acquired a its book price. When determing the value of a firm, which of the following statements is true? • The timing of cash flows a firm can generate is very important in determing the value of a firm. All else being equal, cash received sooner is better.
So price gauging may not be easily defined but it does mean something to those it affects. The Cause of Price Gouging Demand is actually the cause of price gouging, usually when something out of the ordinary occurs. The law of demand states that “if the price of a good increase, holding other
They are losing market shares to securities firms that are not so strictly regulated and to foreign financial institutions operating without much restriction from the Act. 2. Conflicts of interest can be prevented by enforcing legislation against them and by separating the lending and credit functions through forming distinctly separate subsidiaries of financial firms. 3. The securities activities that depository institutions are seeking are both low-risk, by their very nature, and would reduce the total risk of organizations offering them, by
Although you might have made a profit on the sale of the item, there is a cash flow gap as you have not yet received the funds to pay for the item yourself. Simple things like can put smaller businesses in a lot of financial trouble. This cash flow gap could damage credit ratings, miss other opportunities, and force the borrowing of
Net operating cash flow. This cash flow is the revenue net of expenses and tax liabilities for the time period under consideration. Net salvage value. The net salvage value is the after tax net cash flow for the termination, liquidation or sale of an investment, project or business that is financially unsustainable or which the owner simply no longer wishes to keep. This
Question 1 Which of the following is generally NOT true and an advantage of going public? Answer | | Facilitates stockholder diversification. | | | Increases the liquidity of the firm's stock. | | | Makes it easier to obtain new equity capital. | | | Establishes a market value for the firm.
If the IRR is less than the WACC, the project should be rejected, as it impoverishes the firm’s owners. If the IRR equals the WACC, it earns only normal profits (i.e., the owners’ opportunity costs) and accepting it is a matter of indifference. In this care the project’s IRR is 18.031 > 11.88%, therefore the IRR rule tells us the same as the NPV rule: this project will enrich the firm’s owners. We note in passing that in more advanced courses in finance you would learn about projects for which this rule cannot be used. Broadly speaking, they are projects whose cash flows changes sign more than once—e.g., from negative to positive to negative again.
For agreements involving the resale of third-party services in which AT&T Inc. is not considered the primary obligor of the arrangement, AT&T Inc. records the revenue net of the associated costs incurred. For contracts in which AT&T Inc. provides customers with an indefeasible right to
Their objectives are often huge which requires a lump-sum to be invested. The older people choose this security also because it gives fixed income which is guaranteed, there is minimal risk and less management needed. 8) What is laddering GICs? Pros and cons? Ans): Laddering GIC(s) is a proven method of investing (also known as a laddering strategy) it can help you reduce the risk of interest rate fluctuations and increase your portfolio's overall return.
What tax credits can be earned on depreciation of an owned asset or the lease payments? This is another important question. Overall, it is important to consider the longevity and value of the item against corporate goals to determine if a lease or purchase makes more