Why is it important for the financial analyst to: (a) Focus on incremental cash flows, (b) Ignore
Question:
Why is it important for the financial analyst to:
(a) Focus on incremental cash flows,
(b) Ignore financing costs,
(c) Consider taxes, and
(d) Adjust for noncash expenses when estimating projects relevant cash flows?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 45% (20 reviews)
a Its important for financial analysts to focus on incremental cash flows so that the analysts can p...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
Introduction to Corporate Finance
ISBN: 978-0324657937
2nd edition
Authors: Scott B. Smart, William L Megginson
Question Posted:
Students also viewed these Corporate Finance questions
-
Why is it important for the clients of professional accountants to be ethical?
-
Why is it important for financial statements and other external reports to be based on generally accepted accounting principles?
-
Why is it important for your research investigation that you be critical when reviewing the literature? Sarah was in the final year of her undergraduate business studies degree course. She was...
-
Consider an increasing marginal-cost depletable resource with no effective substitute. (a) Describe, in general terms, how the marginal user cost for this resource in the earlier time periods would...
-
What is the goal of prepayment models that use option pricing theory? How do these models differ from the PSA or empirical models? What criticisms often are directed toward these models?
-
Expected return, standard deviation, and coefficient of variation Three assetsF, G, and Hare currently being considered by Perth Industries. The probability distributions of expected returns for...
-
Flow of a viscous fluid over a flat plate surface results in the development of a region of reduced velocity adjacent to the wetted surface as depicted in Fig. P5.25. This region of reduced flow is...
-
The August Manufacturing Company in Rochester, Minnesota, assembles and tests electronic components used in handheld video phones. Consider the following data regarding component T24: The activities...
-
1. Create database named 'Watch'. Create a table named 'Watch' with the data fields as stated below in the database. Watch ID (Primary Key) Model Kind of watch glass Water resistance Strap Validation...
-
The client, Mrs. Tatum, purchased a new microwave oven from Inki Appliances Company. No written or oral warranty was given when the sale was made. The microwave stopped working one week after Mrs....
-
For each of the projects shown in the following table, calculate the internal rate of return (IRR). Project A ProjectB Project C Project D Initial cash outflow (CFo)$72,000 $440,000$18,000 $215,000...
-
When a firm is faced with capital rationing, how can the profitability index (PI) be used to select the best projects? Why does choosing the projects with the highest PI not always lead to the best...
-
Express each radical in simplest form, rationalize denominators, and perform the indicated operations. 3 81 + 3 3000
-
A pork-processing facility is considering installing either a storage facility or a holding pond. A biosystems engineer has been hired to evaluate the economic trade-offs for the two alternatives....
-
A 30 kg male emperor penguin under a clear sky in the Antarctic winter loses very little heat to the environment by convection; its feathers provide very good insulation. It does lose some heat...
-
When you put on the brakes on your bicycle, friction heats the steel rims of your wheels. Could this heating be a problem? Suppose a 65 kg cyclist with a 15 kg bike is descending Trail Ridge Road in...
-
Which of the following is not an approach to replacement analysis? a. Cash flow approach b. Insider viewpoint c. Outsider viewpoint d. Supply chain approach
-
A specialty concrete mixer used in construction was purchased for \($300,000\) 7 years ago. It is MACRS-GDS 5-year property. Its annual O&M costs are \($105,000.\) At the end of an 8-year planning...
-
Joseph Thompson is president and sole shareholder of Jay Corporation (a cash method, calendar year C corporation). In December of the current year, Joe asks your advice regarding a charitable...
-
What is the difference between the straight-line method of depreciation and the written down value method? Which method is more appropriate for reporting earnings?
-
Someone siphoned \(15 \mathrm{gal}\) of gasoline from a gas tank in the middle of the night. The gas tank measures 12 in. wide \(\times 24\) in. long \(\times 18\) in. high and was full when the...
-
Bert has just been hired by your company as a summer co-op student and has been assigned to assist you. Bert is puzzled about why your company is calculating IRR and payback periods for investment...
-
For the following decisions, indicate whether they are examples of a bottom-up analysis or a top-down analysis: a. Replacing the printing press at a newspaper b. A newspapers decision to sell all its...
-
Assume that BigCos cost of capital for all the projects is 7 percent. Calculate the NPV, IRR, payback period, discounted payback, and profitability index for each project in Table 1. The firm...
-
How does the central bank imply Bank Rate fluctuations as the monetary policy mechanism? Explain.
-
1. Calculate the NPV and Profitability Index for each of the following projects, assuming the cost of capital is 7%. YEAR iPad Pro iPhone 9 I 0 -36,000 -11,500 1 18,000 0 2 12,600 7,500 3 4,500 4,000...
-
State the dividend irrelevance proposition. What are the assumptions behind this proposition? Explain why this proposition does not hold in the real world. (20 marks)
Study smarter with the SolutionInn App