Most financial experts will agree that net present value is the best capital budgeting method. However, even NPV can be unreliable when projecting project results. Explain why this is so.
What will be an ideal response?
Given all of its benefits, NPV is still only as reliable as the accuracy of its inputs allows. If the cash flows and assigned discount rate are unrealistic, or turn out to be inaccurate, then the NPV results will likewise be inaccurate. As always, analysis output is always reliant upon the assumptions and values underlying the calculations and the absence of unforeseen future events.
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In a symmetrical relationship, the parties reflect each other’s behavior. This is also a way to do which of the following?
A. mirror B. ignore C. dispute D. defend
The closing process resets ________, ________, and ________ account balances to zero at the end of each accounting period.
What will be an ideal response?
Confirmations of receivables You are the auditor of Maple Bank for the year 2010 . Maple has a large number of customers with consumer loan accounts. The loan accounts have balances averaging $800 in a homogeneous population and the customers usually
pay close attention to their balances. Your preliminary assessment of internal control over the loan area is that control risk is low and results of tests of controls support that assessment. Inherent risk is deemed to be lower as well. Discuss the confirmation process and the types of confirmations that may be used for the audit of Maple Bank. Which confirmation type would you select for Maple and why?
A supportive atmosphere fosters openness where actions and words are non-judgmental
Indicate whether the statement is true or false.