In general, it is argued that the lower of cost or market rule is supported most closely by which of the following theoretical assumptions?
A) revenue recognition
B) Representational faithfulness
C) historical cost
D) going concern
B
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An organization's control environment is established and maintained by the internal auditing department
a. True b. False Indicate whether the statement is true or false
On average, direct marketing generates a return on investment that is less than that of nondirect marketing communication tools
Indicate whether the statement is true or false
What surprising results did Blau (2002) discover when investigating the relationship between organizational size and differentiation (meaning the number of organizational levels in hierarchy, number of departments, and number of job titles)?
a. He found that administrative overheads are lower in larger organizations when managers have greater span of control b. He found that larger organizations have to employ more managers to cope with the greater number of staff c. He found that there was no relationship between differentiation and size d. He found that the size of an organization is disproportionate to the number of people working in it
LEE Corporation intends to purchase equipment for $1,500,000. The equipment has a 5-year useful life and will
be depreciated on a straight-line basis. Addition of the equipment requires additional working capital of $20,000. The $20,000 is expected to be recaptured at the end of the project. LEE's marginal tax rate is 40%. Use of the equipment is expected to change the company's reported EBIT by $600,000 in year one, $700,000 in year two, $550,000 in year three, $200,000 in year four, and $100,000 in year five. Due to changing market conditions, the equipment did have a salvage value of $100,000 at the end of year five. a. Calculate the initial outlay and the incremental free cash flows over the life of the project. b. If the risk-adjusted discount rate for this project is 20%, calculate the project's net present value and internal rate of return and comment on the acceptability of the project.