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on 22-Nov-2017 (Wed)

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Flashcard 1438429875468

Tags
#analyst-notes #cfa-level-1 #corporate-finance #reading-35-capital-budgeting #study-session-10
Question
Which of the following statements represent shortcomings of the post-audit process?

I. Forecasts are always "wrong" to some extent.
II. Forecasts may be "wrong" due to unanticipated circumstances.
III. Forecasts are "wrong" due to the decisions of managers no longer employed by the company.

Answer
Correct Answer: I, II and III


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Independent versus mutually exclusive projects. Mutually exclusive projects are investments that compete in some way for a company's resources - a firm can select one or another but not both. Independent projects, on the other hand, do not compete for the firm's resources. A company can select one or the other or both, so long

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Subject 2. Basic Principles of Capital Budgeting
In a non-conventional cash flow pattern, the initial outflow can be followed by inflows and/or outflows. <span>Some project interactions: Independent versus mutually exclusive projects. Mutually exclusive projects are investments that compete in some way for a company's resources - a firm can select one or another but not both. Independent projects, on the other hand, do not compete for the firm's resources. A company can select one or the other or both, so long as minimum profitability thresholds are met. Project sequencing. How does one sequence multiple projects over time, since investing in project B may depend on the result of investing in project A? Unlimited funds versus capital rationing. Capital rationing occurs when management places a constraint on the size of the firm's capital budget during a particular period. In such situations, capital is scarce and should be allocated to the projects most likely to maximize the firm's aggregate NPV. The firm's capital budget and cost of capital must be determined simultaneously to best allocate the firm's capital. On the other hand, a firm can raise the funds it wants for all profitable projects simply by paying the required rate of return. Learning Outcome Statements b. describe the basic principles of capital budgeting; c. explain how the evaluat







Flashcard 1478043766028

Tags
#cfa-level-1 #reading-23-financial-reporting-mechanics
Question
[...] have future value only as future operations transpire, unless they are refundable.
Answer
prepaid assets


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In practice, particularly in a valuation, one consideration is that prepaid assets typically have future value only as future operations transpire, unless they are refundable.

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ved and the corresponding liability to deliver newsletters) and, subsequently, 12 future adjusting entries, the first one of which was illustrated as Transaction 12. Each adjusting entry reduces the liability and records revenue. <span>In practice, a large amount of unearned revenue may cause some concern about a company’s ability to deliver on this future commitment. Conversely, a positive aspect is that increases in unearned revenue are an indicator of future revenues. For example, a large liability on the balance sheet of an airline relates to cash received for future airline travel. Revenue will be recognized as the travel occurs, so an increase in this liability is an indicator of future increases in revenue. <span><body><html>







#economia #mises
Toda ação humana se orienta por essas relações de troca futuras e somente elas têm importância para o agente homem

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#economia #mises
A tarefa que o agente homem pretende realizar utilizando-se do cálculo econômico é a de estabelecer o resultado da ação pelo con- traste de custos e benefícios

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What does seem clear, however, is that the language learner must first be made aware of himself as a cultural being. Paradoxically, most people, of whatever nation, see themselves and their compatriots not as a culture but as "standard," or "right," and the rest of the world as made up of cultures, which are conglomerates of strange behavior.

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