Uncertainty of cash flows, Financial Accounting

Assignment Help:

 Individuals commonly prefer possession of cash immediately or in the present moment quite than the same amount at any time in the future. Such time preference is fundamentally due to the subsequent reasons:   

(a) Uncertainty of cash flows

(b) Preference for current consumption

(c) Availability of investment opportunities.

In matter of an investor opts to obtain cash in future she/he would demand a risk premium over and above the risk free rate when compensation for time to account for the improbability of cash flows. Discounting and compounding are techniques to support the comparison of cash flows going on at various time periods. In compounding future value of cash flows at a specified interest rate at the end of a specified period of time are cash flows at a specified interest rate at the starting of a specified period of time are determined. An annuity is a series of periodic cash flows of equivalent amount. Perpetuity is an annuity of infinite duration.


Related Discussions:- Uncertainty of cash flows

Prepare a report addressing adjust financial statements, You are the audito...

You are the auditor of a small private company called XYZ Limited. Last year, which was 20X9, the audit went smoothly and every balance on the financial statements was correct. Thi

Prepare a budgeted income statement, The Schrödinger Science Store operates...

The Schrödinger Science Store operates a retail store in a local shopping mall.The results of operations for the fourth quarter of 2011 are as follows: Sales

Courts application for grant, Courts application for grant A court may:...

Courts application for grant A court may: 1) Wherein a deceased person is proved whether by production of a will or authenticated copy of the will or by oral evidence of its

Whats the company''s return on investments?, Sales= 4,500,000 Min required ...

Sales= 4,500,000 Min required return= 15% Avg Operating assets= 1,800,00 Residual Income= 90,000 !) Whats the company's return on investments? Please show work so I can see how

Show the calculations and journal entries to record, Company A subsequently...

Company A subsequently sells 60% of the voting interest in Company S for $900,000. The fair value of Company A's retained interest of 10% in the voting stock in Company S is $120,0

Lenders evaluation, Lenders'  evaluation:   Current  Assets  to  Current  L...

Lenders'  evaluation:   Current  Assets  to  Current  Liabilities,  Quick  Assets  that is current assets minus inventories to Current Liabilities, Long term Debt to Net Assets, to

Partnership accounting, How does ordinary shares and preference shares incl...

How does ordinary shares and preference shares included in the account

OPERATING CYCLE, APPLICABILITY OF THE OPERATING CYCLE IN VEGETABLE GROWING ...

APPLICABILITY OF THE OPERATING CYCLE IN VEGETABLE GROWING BUSINESS

Profit for the period-notes to the accounts, Profit for the period The pr...

Profit for the period The profit for the period has been arrived at after charging the following expenses: Normal 0 false false false EN-US X-NONE

Calculate the total capital, The current balance sheet of CBKH shows $800 m...

The current balance sheet of CBKH shows $800 million of corporate loans ($500 million of which being rated AA- and the remaining rated BBB+), $200 million of bonds issued by an OEC

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd