True or false? Explain briefly. a. Book profitability measures are biased measures of true profitability for individual
Question:
True or false? Explain briefly.
a. Book profitability measures are biased measures of true profitability for individual assets. However, these biases “wash out” when firms hold a balanced mix of old and new assets.
b. Systematic biases in book profitability would be avoided if companies used depreciation schedules that matched expected economic depreciation. However, few, if any, firms have done this.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 30% (10 reviews)
a False The biases rarely wash out For example steady state income may not b...View the full answer
Answered By
Somshukla Chakraborty
I have a teaching experience of more than 4 years by now in diverse subjects like History,Geography,Political Science,Sociology,Business Enterprise,Economics,Environmental Management etc.I teach students from classes 9-12 and undergraduate students.I boards I handle are IB,IGCSE, state boards,ICSE, CBSE.I am passionate about teaching.Full satisfaction of the students is my main goal.
I have completed my graduation and master's in history from Jadavpur University Kolkata,India in 2012 and I have completed my B.Ed from the same University in 2013. I have taught in a reputed school of Kolkata (subjects-History,Geography,Civics,Political Science) from 2014-2016.I worked as a guest lecturer of history in a college of Kolkata for 2 years teaching students of 1st ,2nd and 3rd year. I taught Ancient and Modern Indian history there.I have taught in another school in Mohali,Punjab teaching students from classes 9-12.Presently I am working as an online tutor with concept tutors,Bangalore,India(Carve Niche Pvt.Ltd.) for the last 1year and also have been appointed as an online history tutor by Course Hero(California,U.S) and Vidyalai.com(Chennai,India).
4.00+
2+ Reviews
10+ Question Solved
Related Book For
Principles of Corporate Finance
ISBN: 978-0072869460
7th edition
Authors: Richard A. Brealey, Stewart C. Myers
Question Posted:
Students also viewed these Corporate Finance questions
-
Determine whether the statement true or false explain your answer. A force of 10 lb in the direction of motion of an object that moves 5 gt in 2 s does six times the work of a force of 10 lb in the...
-
True or False: 1. Under oligopoly, individual firms produce only an infinitesimal share of total output. 2. The auto industry is an example of oligopoly. 3. Under oligopoly, as in perfect competition...
-
Explain briefly the term systematic selection as used in auditing and indicate the precautions to be taken if a random sample is to be obtained. Is systematic selection applicable to unnumbered...
-
Write MATLAB code of the question. Do all parts and show code with comments and also attach a screenshot of code and outputs. Using the results of Problem 4.13, verify the following properties of WN...
-
What causes the spectrum of colors seen in gasoline splotches on a wet street? Why aren't these splotches seen on a dry street?
-
Consider the following hypothesis test. H0: 21 = 22 Ha: 21 22 a. What is your conclusion if n1 = 21, s21 = 8.2, n2 = 26, and s22 = 4.0? Use = .05 and the p-value approach. b. Repeat the test using...
-
What are the main stages in the decision-making process in organisational buyer behaviour?
-
Following are seven audit activities. a. Examine invoices supporting recorded fixed asset additions. b. Review industry databases to assess the risk of material misstatement in the financial...
-
A shuttle van picks up passengers and drives them to a destination, where they all leave the van. Keep a count of the boarding passengers, but don't allow boarding if the van is full. First show the...
-
Dorchester, Ltd. is an old-line confectioner specializing in high-quality chocolates. Through its facilities in the United Kingdom, Dorchester manufactures candies that it sells throughout Western...
-
What is meant by delegated monitoring? Who are these monitors and what roles do they play?
-
Calculate the year-by-year book and economic profitability for investment in polyzone production, as described in Chapter. Use the cash flows and competitive spreads shown in Table 11.2. What is the...
-
Referring to the melting point experiment in Exercise 10-25, suppose that the true mean difference in melting points is 3oF. How large a sample would be required to detect this difference using an a...
-
Why and when should we use stack and queue data structures instead of arrays or Lists?
-
Which data structures are applied when dealing with a recursive function?
-
What is LIFO?
-
What is an algorithm and flowchart explain with suitable example?
-
What is a queue?
-
The mutual induction of electric and magnetic fields can produce (a) light. (b) sound. (c) both light and sound. (d) neither light nor sound.
-
Baxter, Inc., owns 90 percent of Wisconsin, Inc., and 20 percent of Cleveland Company. Wisconsin, in turn, holds 60 percent of Clevelands outstanding stock. No excess amortization resulted from these...
-
Go to the website of the World Bank Governance Indicators (http://info.worldbank.org/governance/wgi/index.asp) and examine the indicators for Asian countries. From the information you find there, in...
-
Select the most appropriate term from within the parentheses: a. (High-grade utility bonds/Low-grade industrial bonds) generally have only light sinking-fund requirements. b. Collateral trust bonds...
-
For each of the following sinking funds, state whether the fund increases or decreases the value of the bond at the time of issue (or whether it is impossible to say): a. An optional sinking fund...
-
a. As a senior bondholder, would you like the company to issue more junior debt to finance its investment program, would you prefer it not to do so, or would you not care? b. You hold debt secured on...
-
E3-20 (Algo) Analyzing, Recording, and Evaluating the Effects of Income Statement Transactions [LO 3-3, LO 3-4, LO 3-5] [The following information applies to the questions displayed below.] MyBnB...
-
Required information [The following information applies to the questions displayed below.] The following data reports on the July production activities of the Molding department at Ash Company....
-
Question 1 Vieux Enterprise's total overhead costs at various levels of activity follow: Month Machine- Hours Total Overhead Costs April 70,000 $198,000 May 100,000 270,000 June 80,000 222,000 July...
Study smarter with the SolutionInn App