Questions from Managerial Accounting

Q: Identify two simplifying assumptions associated with discounted cash flow methods of making

Identify two simplifying assumptions associated with discounted cash flow methods of making capital budgeting decisions.

Q: If a company has to pay interest of 14% on long

If a company has to pay interest of 14% on long-term debt, then its cost of capital is 14%.Do you agree? Explain.

Q: What is meant by an investment project’s internal rate of return?

What is meant by an investment project’s internal rate of return? How is the internal rate of return computed?

Q: What is the purpose of a statement of cash flows?

What is the purpose of a statement of cash flows?

Q: What are cash equivalents, and why are they included with cash

What are cash equivalents, and why are they included with cash on a statement of cashflows?

Q: What are the three major sections on a statement of cash flows

What are the three major sections on a statement of cash flows, and what are the general rules that determine the transactions that should be included in each section?

Q: Why is interest paid on amounts borrowed from banks and other lenders

Why is interest paid on amounts borrowed from banks and other lenders considered to bean operating activity while the amounts borrowed are financing activities?

Q: Watkins Trophies, Inc., produces thousands of medallions made of bronze

Watkins Trophies, Inc., produces thousands of medallions made of bronze, silver, and gold. The medallions are identical except for the materials used in their manufacture. What costing system would yo...

Q: If an asset is sold at a gain, why is the

If an asset is sold at a gain, why is the gain deducted from net income when computing the net cash provided by operating activities under the indirect method?

Q: Why aren’t transactions involving accounts payable considered to be financing activities?

Why aren’t transactions involving accounts payable considered to be financing activities?