Unformatted text preview: • What is the time value of money? • Compute payback period with different scenarios (equal and unequal) & transforming net income into a cash basis • Accounting Rate of return – different scenarios • Net Present Value Method- what the method is, what the time value of money is, how to use a simple calculator to present value back a dollar • Internal Rate of return – how to calculate and how it’s used • Advantages and Disadvantages of each method 10 Point Problems 1. Computation of ROI and Residual Income 2. Income statement with direct and indirect cost allocations 3. Make or Buy Decision 4. Income Statements with and without special order 5. Sales mix determination with constraints 6. Capital Budgeting Problem with Avg Rate of return, cash payback, and NPV...
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- Winter '12
- Net Present Value, qualitative factors, Test Review Schmidt, calculation Residual Income