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Discussion Questions Week 8-10




Week 8;All answers will be turned into, please also number each answer;?;1a.Create an argument that the NPV approach to valuation is superior to the IRR approach. Suggest how you would approach getting buy-in from senior management.;? 1b.Analyze the variation in the results of net present value and the internal rate of return for use in evaluating a combination of projects or portfolio of projects and how the variations should impact decision making.;? 2a. From the e-Activity, analyze the factors that should be considered in determining the required rate of return for evaluating projects, in global markets and how this impacts decision making.;? 2b. As CFO, discuss how you would defend the difference in the required rate of return for your company on similar projects in the Brazil and India.;Week 9;? 1a.From the e-Activity, evaluate the logic of reflecting key person life insurance in the operating activities of the cash flow statement and determine if this presentation is misleading to users of the financial statements.;? 1b.Currently, Financial Accounting Standards Board (FASB) has not provided guidance on the appropriate section for reflecting key person life insurance. As a member of FASB, determine the guidance you would provide for key person insurance in the cash flow statement. Provide your rationale.;2a. Analyze the impact of erroneous classifications in the operating activities section of the cash flow statement on free cash flow and how this distortion can impact the decisions made by financial statement users.;2b. Assess the importance of free cash flow in a growth company. Provide a brief scenario of a specific type of business that would benefit from free cash flow.;Week 10;? 1a.From the first e-Activity, evaluate the impact of not considering the current portion of long-term liabilities in the current ratio and working capital, and how this may impact day- to-day business decisions.;? 1b.Determine the implications of a significant positive change in the ratio. Provide a rationale with your response.;2a. From the second e-Activity, elaborate on the potential consequences of eliminating the option to present other comprehensive income within the statement of changes in equity on financial statement users and companies.;? 2b. Evaluate the effect of the increased prominence of other comprehensive income on financial statement users and companies.


Paper#79887 | Written in 18-Jul-2015

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