Which of the following capital budjeting techniques has been criticized because if fails to consider investment profitability?
a. net present value method.
b. payback method.
c. accounting rate of return.
d. internal rate of return.
b
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In the two-period model, suppose a household's income in the first period is $50,000, income in the second period is $60,000, and the real interest rate is 25 percent. Draw a diagram showing the budget constraint. Now, suppose the real interest rate declines to 20 percent. Draw the new budget constraint. For the budget constraints you have drawn, be sure to show the values of the intercepts on each axis. If the household decides that its consumption in period 1 should always be one half of the present value of income, determine whether the household is worse off or better off because of the decline in the real interest rate. Show your work.
What will be an ideal response?
As a general rule, revenue is recognized at the point of sale. Which one of the following situations illustrates this rule?
a. Products are sold to customers on credit with payment due in 30 days. b. Employees are paid wages the week after the wages are earned. c. Products are purchased for resale purposes. d. Interest is collected from amounts loaned to employees.
Velocity is the reciprocal of cycle time
Indicate whether the statement is true or false
A contingent liability is a potential obligation that depends on a future event arising from a past transaction or event.
Answer the following statement true (T) or false (F)