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2 years ago

A. What would be the effect of ignoring the time value of money when making risk management decisions?

Business

1 answer:

Strike441 [17]2 years ago

6 0

Answer:

A) The effect of not taking the time value of assets into consideration during the threat management process is that one's assessments might end up being inaccurate. This inaccuracy arises from not taking into account real-world phenomena such as inflation and interest that have a significant impact on the value of money over time.

) The net present value of a loss control investment represents the difference between the initial investment and all projected cash flow for a venture. It helps the owners of an organization determine whether or not a proposed investment is worth pursuing. If the value is positive, the proposed venture will be pursued. Inversely, if the value is negative, the proposed venture will be vacated.

Explanation: Ignoring the time value of money in risk management decisions may lead to wrong decisions or, at least, less than optimal decisions.

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Residual Income The operating income and the amount of invested assets in each division of Otte Industries are as follows: Opera

igomit [66]

Answer: See explanation

Explanation:

The residual income for each division will be calculated as follows:

Retail division:

Operating income = $8,000,000

Less: Minimum acceptable operating income as a percentage of invested assets = 10% × $40,000,000 = $4,000,000

Residual income = $4,000,000

Commercial division:

Operating income = $12,750,000

Less: Minimum acceptable operating income as a percentage of invested assets = 10% × $75,000,000 = $7,500,000

Residual income = $5,250,000

Internet division:

Operating income = $270,000

Less: Minimum acceptable operating income as a percentage of invested assets = 10% × $1,800,000 = $180,000

Residual income = $90,000

From the information above, we can also see that the commercial division has the highest residual value.

3 0

2 years ago

Managerial accounting is different from financial accounting in that: Multiple Choice Managerial accounting is more focused on t

miss Akunina [59]

Answer: Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions.

Explanation: Managerial accounting is the type of accounting under which the managers use the accounting estimates and make several assumptions to make decisions that can affect future results of business operations.

Under financial accounting recording, summarizing and presentation of data in a financial statement is done. It is used to keep track of the past transactions hence no assumptions are needed to make for important aspects.

8 0

2 years ago

Which of the following is NOT true? Group of answer choices A call option gives the holder the right to buy an asset by a certai

Setler79 [48]

Answer:The holder of a call or put option must exercise the right to sell or buy an asset.

Explanation:The holder of a right or put option has the right to exercise that power but it is not a mandatory right,he or she can decide not to exercise that power.

All other options are correct, a call or gives the holder the right to buy an asset at a certain date and at a specific price.

A put option gives the holder the right to sell an asset at a specific date and price.

The holder of a forward contract is obligated to buy or sell an asset.

3 0

2 years ago

Compare the results of your personal time allocation to your ideal time allocation. Are you close to your ideal allocation? If n

miv72 [106K]

Answer:

As an individual, I am not close to my ideal time allocations as such allocation got affected by many factors that are beyond the control of an individual. One has to depend on the external environment which is composed of other individuals receding near you.

The sleeping schedule, health both mental and physical affects the time allocation significantly. Due to distress and overload panics one serves more time in sleeping than adequate.

3 0

2 years ago

TufStuff, Inc., sells a wide range of drums, bins, boxes, and other containers that are used in the chemical industry. One of th

kozerog [31]

Answer:

It is more convenient to produce in house. But, the best option would be to produce 2,875 units and buy the rest of 3,375 demand.

Explanation:

Giving the following information:

Cost per drum:

Direct materials $45.40

Direct labor ($18 per hour) 4.50

Manufacturing overhead 4.05

Selling and administrative expense 16.30 70.25

Margin per drum $ 104.75

Management believes 3,375 WVD drums could be sold each year if the company had sufficient manufacturing capacity.

Harcor Industries, Inc., a supplier of quality products, would be able to provide up to 1,800 WVD-type drums per year for $130 per drum.

We will assume that the selling cost will remain whether it is purchased or make in house.

Make in house:

Unitary cost= 45.40 + 4.5 + 4.05 + 70.25= $124.2

Buy= $130

Gross profit (make in house)= 175 - 124.2 - 16.3= 34.5

Gross profit (buy)= 175 - 130 - 16.3= 28.7

It is more convenient to produce in house. But, the best option would be to produce 2,875 units and buy the rest of 3,375 demand.

5 0

2 years ago