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Because this computation attempts to calculate the average book value of an investment by simply averaging the initial and liquidation values.

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16y ago

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When a firm chooses to buy a new fixed assets it is making a decision?

capital budgeting


What are the limitations of capital budgeting process?

Capital budgeting limitations are as follows:-It has long term implementations which can't be used in short term & it is used as operations of the business. A wrong decision in the early stages can affect the long term survival of the company. The operating cost gets increased when the investment of fixed assets is more than required.Inadequate investment makes it difficult for the company to increase its budget & the capital.Capital budgeting involves large number of funds so the decision has to be taken carefully.Decisions in capital budgeting are not modifiable as it is hard to locate the market for capital goods.The estimation can be in respect of cash outflow and the revenues or saving & costs attached which are with projects.


Determine factors that will influence to choice between labor intensive and capital intensive technique?

Size of the business


What are examples of intellectual capital in the form of structural intangible assets?

examples of these systems are the information system, accounting system, purchasing system, and sales system


What are the key concepts covered in a typical corporate finance textbook?

A typical corporate finance textbook covers key concepts such as financial analysis, capital budgeting, risk management, cost of capital, and corporate valuation. It also includes topics like financial markets, mergers and acquisitions, and corporate governance.