managerial accounting 16th ed textbook solutions manual chapter 13
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managerial accounting 16th ed textbook solutions manual chapter 13
Chapter 13Capital Budgeting DecisionsSolutions to Questions13-1Ạ capital budgeting screening decision IS concerned with whether a.proposed investment managerial accounting 16th ed textbook solutions manual chapter 13 project passes a preset hurdle, such as a 15% rate of return. A capital budgeting preference, decision is concerned with choosing from among tovo or more alternative investment projects, each of which has passed the hurdle.13-2 The ''time value of money" refers to the fact that a dollar received to managerial accounting 16th ed textbook solutions manual chapter 13 day is more valuable than a dollar received in the.future simply because a dollar received today can be invested to yield more than a dollar in the fumanagerial accounting 16th ed textbook solutions manual chapter 13
ture.13-3 Discounting is the process of computing the present value of a future cash flow. Discounting gives recognition to the time value of money anChapter 13Capital Budgeting DecisionsSolutions to Questions13-1Ạ capital budgeting screening decision IS concerned with whether a.proposed investment managerial accounting 16th ed textbook solutions manual chapter 13 on cash flows.. Both the net present value and internal rate of return methods focus on cash flows.13-5 Unlike other common capital budgeting methods, discounted cash flow methods recognize the time value of money and take into account all future cash flows.13-6 Net present value is the present valu managerial accounting 16th ed textbook solutions manual chapter 13 e of cash inflows less© The McGraw-Hill Companies, Inc., 2018Solutions Mani,al1This document IS available free of charge on StuDocu.comDownloaded by Pmanagerial accounting 16th ed textbook solutions manual chapter 13
ham Quang Huy (etxx*4you ortine@gmaii com)the present value of the cash outflows. The net present value can be negative if the. present value of the oChapter 13Capital Budgeting DecisionsSolutions to Questions13-1Ạ capital budgeting screening decision IS concerned with whether a.proposed investment managerial accounting 16th ed textbook solutions manual chapter 13 cash inflows are immediately reinyested at a rate of return equal to the discount rate.13-8 No. The cost of capital is not simply the interest paid on longterm debt. The cost of capital is a weighted average of the, costs of, all sources of financing, both debt and equity.13-9 The internal rate of managerial accounting 16th ed textbook solutions manual chapter 13 return is the rate of return on an investment project over its life. It is computed by finding the discount rate that results in a zero net present vamanagerial accounting 16th ed textbook solutions manual chapter 13
lue for the project.13-10 The cost of capital is a hurdle that must be cleared before an investment project will be accepted, fa) In the case of the nChapter 13Capital Budgeting DecisionsSolutions to Questions13-1Ạ capital budgeting screening decision IS concerned with whether a.proposed investment managerial accounting 16th ed textbook solutions manual chapter 13 ceptable because (its rate of return is., greater than the cost of capital, (b) In the case of the internal rate of return method, the cost of capital is compared to a project's1internal rate of return. If the project's internal rate of return is greater than.the cost of capital, then the project is managerial accounting 16th ed textbook solutions manual chapter 13 acceptable.13-11 No. As the discount rate increases, the present value of a given future cash flow decreases. For example, the present value factor fmanagerial accounting 16th ed textbook solutions manual chapter 13
or a discount rate of 12% for cash to be received ten years from now is 0.322, whereas the present value factor for a discount rate of 14% over the saChapter 13Capital Budgeting DecisionsSolutions to Questions13-1Ạ capital budgeting screening decision IS concerned with whether a.proposed investment managerial accounting 16th ed textbook solutions manual chapter 13 ase. Thus, as the discount rate increases, the present value of a given future cash flow decreases.13-12 The internal rate of return is more than 14% because the net present value is positive. The internal rate of return would be 14% only if the net present value (evaluated using a 14% discount rate managerial accounting 16th ed textbook solutions manual chapter 13 ) is zero The internal rate of return would be less than 14% if the net present value (evaluated using a 14% discount rate) is negative.13-13 The projmanagerial accounting 16th ed textbook solutions manual chapter 13
ect profitability index is computed bydividing the net present, value of the cash flows from an investment project by the required nvestment. The ihdeChapter 13Capital Budgeting DecisionsSolutions to Questions13-1Ạ capital budgeting screening decision IS concerned with whether a.proposed investment managerial accounting 16th ed textbook solutions manual chapter 13 he more desirable is the investment project.13-14 The payback period is the length of time for an investment to fully recover its . initial cost out of the cash receipts that it generates. The payback method is used as a screening tool for investment proposals. The payback method is useful when a co managerial accounting 16th ed textbook solutions manual chapter 13 mpany has cash flow problems. The payback methodi is ậlso used in industries where obsolescence is very rapid.13-15, Neither the payback method nor thmanagerial accounting 16th ed textbook solutions manual chapter 13
e simple rate of return method considers the time value of money. Under both methods, a dollar received in the future is weighed the same as a dollar Chapter 13Capital Budgeting DecisionsSolutions to Questions13-1Ạ capital budgeting screening decision IS concerned with whether a.proposed investment managerial accounting 16th ed textbook solutions manual chapter 13 mpanies, Inc., 20122Managerial Accounting, 14th EditionDownloaded by Pham Quang Huy (etx»'<4you omine@gtvaii com)Chapter 13: Applying ExcelThe completed worksheet is shown below.Note: Your worksheet may differ from the above in rows 29 and 30. The worksheet above has been set to use the rounded-off managerial accounting 16th ed textbook solutions manual chapter 13 discount factors rather than more exact factors without rounding. For example, the factor 0.519 is rounded off from 0.519368664. If the more exact facmanagerial accounting 16th ed textbook solutions manual chapter 13
tor is used to calculate the present value of the $150,000 total cash flow at the end of year 5, the answer is $77,905 rather than $77,850. These rounChapter 13Capital Budgeting DecisionsSolutions to Questions13-1Ạ capital budgeting screening decision IS concerned with whether a.proposed investment managerial accounting 16th ed textbook solutions manual chapter 13 Companies, Inc., 2018Solutions Mani,al3This document IS available free ot charge onChapter 13Capital Budgeting DecisionsSolutions to Questions13-1Ạ capital budgeting screening decision IS concerned with whether a.proposed investmentGọi ngay
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