Is the claim that lower company taxes adding to investments correct or is it debatable given the prediction on economic growth remains negative, and can you explain why?

Q: Which of the following statements is CORRECT? O The more depreciation a firm reports, the higher its…

A: Depreciation means reduction in value of fixed assets over the period of time. It is for normal wear…

Q: Which of the following statements is incorrect? Select one: A. It is possible for markets to be…

A: According to the efficient market hypothesis, all the information available in the market is…

Q: Which statement about the cost of capital is incorrect? *     A. If a company’s tax rate increases…

A: The weighted average cost of capital (WACC) is the sum of costs of different sources of finance…

Q: Which of the following statements support reasons that companies make investments? Select all that…

A: Introduction:- Companies make investment for getting income from non operating activities.…

Q: Explain Why you agree or disagree with the following statement. The answer should not be more than 3…

A: The MM theory helps to understand the impact of different sources of capital and the tax rates on…

Q: Which of the following is not a determinant of investment? a) The efficiency of capital equipment…

A: To increase capital assets, business do investments in property, fixed assets, financial market,…

Q: A company should accept for investment all positive NPV investment alternatives when which of the…

A:

Q: Which of the following statements regarding EVA is NOT CORRECT? Group of answer choices: EVA assumes…

A: EVA represents the increment in the return on investment of the company. If the EVA is not positive,…

Q: Explain Why you agree or disagree with the following statements. The answer should not be more than…

A: MM proposition 1 is am important tool which provides the insights on capital structure of firm in…

Q: Why do companies accelerate depreciation on their tax return but often use slower depreciation…

A: Companies generally use accelerated depreciation on their tax return, as these methods result in a…

Q: Choose the correct. Which of the following is not included in the assumption on which Myron Gorden…

A: Gorden Proposed Model: The market value of share is equal to the present value of future dividends.…

Q: What would be a reason a company would want to understate income?A. to help nudge its stock price…

A: Profitability of the business is an important measure for business evaluation. It depends on the…

Q: How would rising interest rates, that increase the weighted average cost of capital  (WACC) impact…

A: Weighted average cost of capital is the average cost of capital weighted by the proportion of the…

Q: ith a decline in the number of publicly traded companies and the growth of other investment vehicles…

A: The high net worth individuals are those individuals which trade or invest in big amount and having…

Q: Which of the following is not a reason a company would be willing to accept new business at a loss?…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: What would be a reason a company would want to overstate income?A. to help nudge its stock price…

A: Income of the business is very important and useful measure of profitability of the business. More…

Q: Which of the following is a criticism of a policy of maximizing the firm’s return on equity (ROE)?…

A: The question is based on the concept return on equity (ROE) ROE is a part of ratio analysis to find…

Q: Can you identify a possible explanation for the company’s declining profits? If so, what is it?

A: Company's declining profits can be possible due to overhead expenses.  Overhead costs are the…

Q: Which of the following statements is not correct? Group of answer choices A)Purchasing fixed assets…

A: A)Purchasing fixed assets using cash decreases the current ratio. Purchasing fixed asset using cash…

Q: Which of the following statements is false regarding the abnormal earnings approach to valuation?…

A: Abnormal earning valuation This method of valuation helps to determine company’s net worth based on…

Q: Consider the trade-off theory of capital structure and the market timing theory in answering this…

A: The capital structure theories are related to the issuing of debt and equity. The ratio between debt…

Q: Discuss why it is advisable to invest in a group of financial assets rather than investing in just…

A: An investment is refer as an asset purchased with intention to earn income at some time in future.…

Q: Why is the present value of an amount lesser than its value that is to be received (paid) in the…

A: The amount that is currently assigned to any investment contract which will be realized or expected…

Q: political risk to a company's bottom line?

A: Introduction: Political risks can be defined as those risks which would be faced by the investors or…

Q: Which of the following is NOT a Financial objective? a. Growth in earnings b. A bigger market share…

A: 1. Financial Objective - Financial Objectives are the objectives set by the organization.

Q: Question A18 Which of the following is not an advantage of the NPV investment appraisal technique…

A: NPV is net present value method which uses present value of cash inflows and cash outflows. ARR…

Q: Which one of the following is an advantage of LIFO? a. In periods of rising prices, less income…

A: >> LIFO Method means Last in first out i.e latest purchase is sold first. >> In rising…

Q: Which of the following statements is correct? A. If assets and spontaneously generated liabilities…

A: Additional funds needed (AFN) / External financing needed (EFN) is the amount of money a company…

Q: Practice : a: The computation of return on average investment ignores one characteristic of the…

A: Capital budgeting refers to the technique of evaluating a project for investing in it. It has…

Q: Which of the following is not an assumption made by Modigliani and Miller in relation to the…

A: The question is related to theories of Capital Structure.  As per MM Approach, a change in…

Q: Let's say the government imposes a one-time, flat tax on each business operating in a fully…

A: Interest is added to loans made to individuals and businesses. The main source of revenue is this.…

Q: Which of the statement is TRUE in financial decision making?      A. When the economy is growing of…

A: Financial Decision making refers to the decisions made by the managers with regard to the finances…

Q: If the present value of a firm's marginal financial distress costs are equal to the present value of…

A: Financial distress costs means the firm cannot pay its debt or firms have insufficient cashflow.…

Q: Holding other factors constant, an increase in the tax rate on revenue generated by capital will:…

A: Increase in tax rate acts as the addition of tax liability of the business. This tax rate is…

Q: Explain intuitively how a manager could tweak the salvage value of machinery to benefit from an…

A: The question is related to Capital Budgeting and portfolio management.

Q: Explain intuitively how a manager could tweak the salvage value of machinery to benefit from an…

A: Depreciation is an expense that decreases the Net profits of the firm, Managers might reduce the…

Q: Which of the following statements is correct? A. If a firm’s assets are growing at a positive…

A: AFN stands for “additional funds needed,” and it refers to the additional resources that will be…

Q: An increase in a firm's inclination to pay dividends may be because of a decline in profitable…

A: Dividends are paid by the company to their shareholders as a share of the profits.

Q: True of False? Contributed capital decreases when the company has a net loss. If your answer is…

A: Net income is an excess of revenue over expenditure and Net loss indicates that there are more…

Q: Which of the following best describes the most common criticisms of the investment styles of Warren…

A: An investor's or money manager's investing style is the strategy and philosophy he or she use while…