[jeff]

@h0wdyus

Incorrect

The answer is B. Comparable sales.

“The use of comparable sales is not an income approach to valuation of a business, it is a market approach. Under the comparable sales approach, the value of a business is determined by comparing it to other entities with comparable characteristics for which the value is more readily determinable.”

This was a tricky one

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[GoVPI]

Risk is the possibility something will occur and hinder the achievement of goals or objectives.

Risk management is identifying events that may affect the entity, manage or mitigate the risk and provide assurance that the company can achieve its goals or objectives.

Worded my own way ^

Which of the following events would decrease the internal rate of return of a proposed asset purchase?

Decrease tax credits on the asset.

Decrease related working capital requirements.

Shorten the payback period.

Use accelerated, instead of straight-line depreciation

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[GoVPI]

@zack… can you devote at least an hour a day on multiple choice?

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[M.O.D.]

@CPA14 nice wording, that's the way to know it

Decreasing tax credits would decrease IRR.

Decreasing working capital required would increase IRR

Shortening the payback period required has nothing to do with IRR.

Using accelerated depreciation would increase the IRR.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[GoVPI]

What is a balanced scorecard?

What are for 4 components and why is it important for an organization to use a balanced scorecard

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[Zackrampage]

@CPA14 I'll have to try to do a minimum of an hr. During commutes ill be reading notes.

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[stoleway]

Balance scorecard is a strategic and management system used in business and organisations worldwide.

It increases focus on results, align business activities with org strategy and improve on performance and communication.

The four perspectives are:customer, financial, internal business processes and learning and growth.

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[stoleway]

1 and -1,which one of these will reduce or if possible eliminate unsystematic risk?

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[M.O.D.]

Re: balanced scorecard

Yes, and it is called balanced because it counts more than just financial results as performance evaluators. It measures non-financial qualities such as customer satisfaction, employee motivation, operational efficiency.

Re: unsystematic risk, a correlation of -1 means that when one business is doing well, the other does poor and vice versa. Therefore holding both companies has the effect of diversifying this unsystematic risk.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[M.O.D.]

Question: how do you calculate WACC?

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[stoleway]

MOD you're correct on the unsystematic risk.

WACC= capital structure(%) x after tax cost of capital

tax only applies to debt tho.

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Zackrampage]

Whats my best method memorizing formulas? (aside merely understand them)

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[RUGUY22]

Re: WACC

Take the relative share (percentage) that each component (bonds, common stock, preferred stock) of long-term financing makes up of the total amount of financing and multiply it by its respective cost (expected rate of return by investors). For bonds, you'd have to compute the after-tax cost [cost x (1 minus tax rate)]. You sum the results of those three and there's your WACC.

IL Candidate

AUD - 98 (11/11/13)
BEC - 69 (4/19/14); 83 (7/21/14)
FAR - 88 (11/26/14)
REG - 90 (2/26/15)

Ethics - 98 (3/9/15)

Using the CPAexcel review course and Wiley Test Bank.

[RUGUY22]

I'd consider flash cards as the best approach to memorizing the formulas. Going through the MCQs will also help, as you'll have to recall the formulas in order to solve some of the problems.

IL Candidate

AUD - 98 (11/11/13)
BEC - 69 (4/19/14); 83 (7/21/14)
FAR - 88 (11/26/14)
REG - 90 (2/26/15)

Ethics - 98 (3/9/15)

Using the CPAexcel review course and Wiley Test Bank.

[Zackrampage]

@Rugu I'm thinking of writing them all out on cards.

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[RUGUY22]

What is the income reconciliation rule and how do you calculate it?

IL Candidate

AUD - 98 (11/11/13)
BEC - 69 (4/19/14); 83 (7/21/14)
FAR - 88 (11/26/14)
REG - 90 (2/26/15)

Ethics - 98 (3/9/15)

Using the CPAexcel review course and Wiley Test Bank.

[Author]

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