How can a company decide the depreciation method and why? | Homework.Study.com (2024)

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• What is depreciation? What are the methods to calculate depreciation? Why is it important in accounting?
• Do you think what is the most widely used depreciation method? Why? Explain your reasoning.
• How do the two methods of depreciation compare and contrast?
• How do I model the impact of currency depreciation on a company's income statement?
• Explain depreciation.
• What is the best way to explain depreciation with an analogy?
• How do the provisions for depreciation defer from the accumulated depreciation?
• Explain the following concepts in detail: Depreciation and appreciation.
• What are some benefits of the Benefits-Cost Ratio? What are some disadvantages? What are some depreciation methods? What are the more common methods used in the United States? What does depreciation m
• What is meant by depreciation, and where will you show the depreciation in final accounts?
• What is depreciation? How does it affect a business's ability to purchase new equipment versus keeping existing equipment? Use an example to explain your answer.
• Let's say that the depreciation expense goes up by $100. How would this affect the financial statements?
• Explain a situation that demonstrates the "real world" application of the concepts of appreciation and depreciation.
• Explain what are the impacts of the size of a company in the capital budgeting methods.
• Discuss how an asset's cost is determined, as well as two methods of depreciation. Provide an example of an asset that would be depreciated, and demonstrate how the expense would be calculated and reported on the financial statements.
• What decision would benefit from the use of NPV calculations (other than car purchasing) and why?
• Explain in detail why NPV is the best criterion for making rational decisions?
• Define depreciation. Use a maximum of two sentences for your answer.
• Explain the two types of material losses and how each is treated in accounting.
• Give an example of currency depreciation and explain what causes currencies to depreciate.
• How does the Insolvency Ratio help to analyze Investment?
• Explain how a company could choose to get bigger, yet lower their average costs.
• What are some factors to consider in evaluating a company's ability to make payments on outstanding debt? Explain each factor.
• Explain the best way to calculate opportunity cost with variables.
• How do companies determine prices for their products? Discuss several methods.
• Explain the steps to be followed during the capital budgeting decision-making process.
• How does price discrimination by airlines affect NPV, IRR, Cash flow estimates, Profitability indices, and the cost of capital?
• How can the Net Present Value methodology be used at work and in your personal decision when selecting amongst alternatives?
• Using a non-numerical example, explain how firms should decide how many employees to hire.
• Suppose you have been working with the federal government for a period of time, and you decide to form a small company. Explain the difference between depreciation and the facilities capital cost of m
• How would internal markets adjust for or take the cost of capital into account?
• *Discuss and explain in detail why costs are subjective and not objective: When accountants measure costs, they add up measurable items such as labor costs, depreciation of capital, interest costs and
• Discuss how companies can maximizing profits and minimizing losses.
• Describe the following method of capital budgeting: Net present value method.
• How would an accountant define profit or loss?
• Explain how the concept of risk can be incorporated into the capital budgeting process.
• A firm purchases two factors, X and Y. How does it determine how much of each factor it should buy? Explain your answer.
• How does a firm decide when to produce internally or incur external transaction costs? Describe a situation for both, and be sure to include costs and advantages for each.
• Explain how cost and extent decisions affect the allocation of assets to higher value uses.
• Explain the mental accounting and the affect on consumption decisions of an individual.
• Define equity and efficiency. How can we balance between them?
• Explain how you might use financial statements to evaluate business performance.
• The meaning and types of depreciation The difference between book depreciation and tax depreciation
• Explain how firms' decisions about prices and quantities depend on the market conditions they face.
• Explain the purpose of Generally Accepted Accounting Principles (GAAP).
• Explain how market structures determine pricing and output decisions of businesses.
• Explain the capital Asset pricing model and its application in identifying organizational value and capital structures.
• How are human and physical capital investment decisions similar? How do they differ?
• Why is the GAAP concept of objective measurement paramount in understanding asset valuation?
• Explain the importance of taking into account the opportunity costs (implicit costs) in investment decisions.
• The absorption approach deals with the income effects of depreciation. Can you explain the implication of this effect on domestic expenditure?
• Briefly explain the difference between sunk costs and opportunity costs. How do these concepts influence economic analyses and decision making?
• How to determine the fair market value of a common stock? Include the theoretical model's assumptions and problems for application.
• The biggest disadvantage of the net present value method is that it requires some guesswork about the firm's cost of capital. What would you do to attempt to accurately predict the cost of capital?
• Suppose that the manager of a firm, that uses coal energy, decides to install new equipment that will reduce air pollution like acid rain. Explain how this decision will affect the value of the firm.
• Explain when the investment's NPV will be positive.
• Explain/Define expensed costs.
• Explain how standardizing accounting principles help financial markets work more efficiently.
• Explain how to calculate the opportunity cost per unit.
• How would you differentiate Opportunity Cost from Sunk Cost? Provide examples for both costs in your life.
• Explain how the concept of "unemployment" is dependent on value judgment.
• A. What is the difference between accounting profits and economic profits? B. Which of the two concepts is more appropriate for explaining decisions made by entrepreneurs? Explain.
• What is the difference between accounting profits and economic profits? Which of the two concepts is more appropriate for explaining decisions made by entrepreneurs? Explain.
• How does a corporation's decision to pay dividends affect its overall tax rate?
• How can the decision rule be used to determine how to spend $5 million?
• Pick any company of your choice and describe how it has formulated and implemented a "value-creating" strategy.
• Describe a pricing decision your company (you can imagine any company) has made. Was it optimal? If not, why not? How would you adjust the price? Compute the profit consequences of the change.
• Explain why the Factory Overhead account for a company may have a difference between the amount debited and credited at the end of an accounting period before adjustment.
• How does a company decide they need to benchmark one of their processes?
• State and explain two reasons for equity in society.
• How can a decision-maker identify strategic factors in a corporation's internal and external environment?
• How can companies plan their pricing strategies? Explain.
• Explain how you would use the decision rule to determine how to spend $5 million.
• Describe the different ways that taxes affect a company.
• How do financial statements help in assessing the performance of a business?
• Explain the different circ*mstances under which Time Cost Method or Contingent Valuation Method would be the most appropriate method to use.
• Briefly explain the two alternative approaches that can be used to account for flotation costs.
• Explain the different roles that the balance sheet and the profit and loss statement play in a company.
• What is the difference between accounting profits and economic profits? Which of the two concepts is more appropriate for explaining decisions made by entrepreneurs?
• Explain the advantages of using capital in the production process.
• How does a change in expected profitability affect aggregate investment?
• Explain the business and revenue model for lastminute.com and assess the potential for profitability.
• How do sole proprietorships, partnerships, and corporations differ with respect to decision-making within the business?
• How do sole proprietorships, partnerships, and corporations differ with respect to raising capital?
• Define capital budgeting and explain why it is important.
• Even though NPV, breakeven analysis, Schiller's P/E, shut down can be used to make decisions, why are they not used to make decisions? Explain each technique. What are the limitations of these techniques?
• How Do Firms Make Production Decisions in the Short Run?
• Describe limitation of ratio method in financial accounting.
• When would a firm pay higher than the equilibrium wages? Define and explain what might cause a firm to make this decision.
• Explain what is meant by explicit, implicit, and sunk costs. How are they used to calculate accounting profit and economic profit?
• How do consumers use cost-benefit analysis? Why do consumers make different decisions using this process?
• Explain the difference between accounting and economic profit.
• Explain the study of how firms' decisions about prices and quantities depend on the market conditions they face.
• Explain how the company decides to give its senior executives a one-time $100,000 bonus would affect the average variable cost at the Ford Motor Company.
• Using a company with which you are familiar, explain comparative advantage and how it is used by the company.
• Explain how the company decides to give its senior executives a one-time $100,000 bonus would affect the marginal cost at the Ford Motor Company.
• Explain the term "capital budgeting" and give some of its importance.
• What is the difference between risk and uncertainty and how you would consider them in evaluating an investment decision?
• Describe alternative forms of capital inflow to finance external deficits, and explain why these methods were used in different times.
• What are opportunity costs and how do they help a firm decide how to maximize profits?