Explain why terminal values in accounting-based valuation are significantly lower than those for DCF valuation
DCF terminal values include the present value of all expected cash flows beyond the forecast horizon. Note that the expected cash flows beyond the forecast horizon can be broken down into two parts: normal and abnormal. Since the terminal value in the accounting-based technique includes only the abnormal earnings (expected earnings minus cost of capital times beginning book value of equity), the terminal values in accounting-based valuation are significantly less than those for DCF valuation. The accounting-based approach recognizes that current book value and earnings within the forecast horizon already reflect many of the cash flows expected to arrive after the forecast horizon.
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A materials requisition is sent to the purchasing agent by the materials storeroom clerk to request that additional materials be purchased.
Answer the following statement true (T) or false (F)
Hilliard Company budgeted the following transactions for April Year 2: Sales (75% collected in month of sale)$200,000 Cash operating expenses 105,000 Cash purchase of investment 75,000 Cash payment of debt 15,000 Depreciation on operating assets 12,000 The beginning cash balance was $50,000. The company desires to have a $25,000 ending cash balance. The surplus (or shortage) of cash before considering any financing activities (that is, borrowings or repayments) during in April would be:
A. $40,000 surplus. B. $40,000 shortage. C. There is no cash surplus or shortage. D. $20,000 surplus.
A new vendor should be added to an authorized vendor database by an individual in the purchasing department
a. True b. False Indicate whether the statement is true or false
The ______ assessment leads to the generation of strategic premises about the future environment, while the ______ assessment leads to a redefinition or reaffirmation of organizational core competencies.
a. external; internal b. internal; external c. environmental; SWOT d. SWOT; environmental