• 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.
Financial Statements ACC/280 May 01, 2012 Edward Vargas Financial Statements Accounting is extremely important by monitoring the functions of the companies, and allowing them to make appropriate financial transactions and decisions. Some areas of accounting can seem confusing and difficult but in the end the outcome is clear and concise. There are two basic forms of accounting known as; financial and managerial accounting. Financial accounting responsibilities are to follow the General Accepted Accounting Principles (GAAP) that is regulations for investor relations, creditors, and taxation purposes, whereas managerial accounting is for internal evaluation. There are different functions and categories that accounting
The reward/need satisfaction theory of relationship proposed by Byrne & Clore (1970) asserts that if a relationship is seen to offer the prospect of reward (for either party), it is more likely to form – if there is little or no perceived reward, the relationship does not form. Their model is based on the behaviourist principles of operant and classical conditioning. According to the former, behaviour that results in a beneficial outcome makes repetition of this behaviour more likely, whereas if the outcome is undesirable, the behaviour is less likely to be repeated or continued. A relationship that brings perceived advantages is a case of positive reinforcement but the relationship can also be characterised by negative reinforcement if the
(Points : 5) If a project with normal cash flows has an IRR greater than the WACC, the project must also have a positive NPV. If Project A's IRR exceeds Project B’s, then A must have the higher NPV. A project’s MIRR can never exceed its IRR. If a project with normal cash flows has an IRR less than the WACC, the project must have a positive NPV. If the NPV is negative, the IRR must also be negative.
True (f) The objective of financial reporting is the foundation from which the other aspects of the framework logically result. True E2-4 Instructions Identify the appropriate qualitative characteristic(s) to be used given the information provided below. (a) Qualitative characteristic being employed when companies in the same industry are using the same accounting principles. Comparability (b) Quality of information that confirms users’ earlier expectations. Confirmatory value (c) Imperative for providing comparisons of a company from period to period.
This could lead to interest drain, leading to a decrease in gain. Benefits associated with using project finance are: - Project finance is less risky for partners in the JV than simply financing it themselves. - Protects the companies from bankruptcy risks since they have limited responsibility. - Protects companies debt capacity for future requirements. - Project is legally independent.
1. Comment on the difference between net cash provided by operating activities and net income. Speculate on which number is likely to be the better indicator of long-term profitability. The statement of cash flows is divided into operating, financing and investing activities, and then within each section, the sources and uses of the are provided in greater detail. Net cash provided by operating activities indicates the net sources and uses of cash in operating activities.
To be effective the rewards must be desired by the target group e.g. financial inducements. * Legitimate power – generally known as authority and implies the power to act as well as the power over resources and is invariably limited in some way. * Expert power – which comes from possessing specialist knowledge and skills and is dependent on the expertise being recognised by those concerned, thus credibility is vital otherwise no one will take any notice. * Referent power – generally known as personal power or charisma and comes from the high regard the individual is held by others should this falter or wane then this form of power vanishes, but is often employed in conjunction with other sources.
The final account that is on the balance sheet under the net assets and fund balances of the balance sheet would be the unrestricted net assets account. This account can be a target for the organization for an intentional misstatement because they could show that they have more assets that are unrestricted when realistically they could be restricted. Being able to show the difference would involve a detailed inspection. The auditor should do analytical procedures and substantive tests in order to detect these
The advice1 continues—'Where there is more than one transaction involved, the case for trading will be much stronger if the pattern appears to be a series of related transactions occurring at not too great intervals of time, and presenting the appearance of habitual and continuous activity.' B1.406-The Nature of the Asset It may be that the nature of the asset is a strong indication of trading or of an adventure in the nature of trade. This is particularly so when considering the distinction between investments and trading stock. If the sole advantage of possession is the immediate prospect of realisation there is a strong inference of trading. Some assets have a strong presumption of investment.