[jeff]

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

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

[Star86]

Does anyone have a good example or definition of an object-oriented database? I've tried Googling it, but can't seem to locate a description that's in layman's terms. Thanks.

Thankful

[youngh]

Anyone use Becker to study for this, and completely bomb the 2nd practice exam? That thing was insane, I was averaging high 80s and 90s on the progress tests, got a 76 average on the first practice exam, and then I get hit like a truck with the second one..

FAR - 87
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[knotworthy91]

@youngh

same exact thing happened to me. There were questions on there that were absurd and didn't even seem relevant to the Becker material. I've been doing well on the progress tests as well, so that's keeping the confidence high. Those seem to replicate the exam experience much more than the final exam does.

I've only taken one exam so far, but from my experience on that one and from what I've always heard, the average person does much better on the actual exam than the Becker final exams.

AUD 91
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[Anonymous]

Can someone help me with this? Thanks.

Does payback method take salvage value into account in calculating cash flows?

Here's what my book says and the last sentence in all caps below is getting me confused:

Fact No. 1: Salvage value is specifically considered as part of payback computations because it contributes to the incoming cash flow when the asset is sold.

Fact No. 2: Payback and bailout payback do not consider the TVOM or the return after the initial investment is recovered. THE DIFFERENCE BETWEEN THE TWO METHODS IS THAT BAILOUT PAYBACK TAKES SALVAGE VALUE INTO ACCOUNT IN CALCULATING CASH FLOWS.

[mtwst113]

@Amor D – The payback method does NOT take into account future cash flows. I studied Becker and haven't heard of the bailout method.

BEC | √
AUD| √
FAR| Spring 2015

[Anonymous]

CPA-04836

Which of the following statements is true regarding the payback method?

a.

It is the time required to recover the investment and earn a profit.

b.

It is a measure of how profitable one investment project is compared to another.

c.

The salvage value of old equipment is ignored in the event of equipment replacement.

d.

It does not consider the time value of money.

Explanation

Choice “d” is correct. The payback method determines the number of years that it will take for a company to recoup or be paid back for its investment. The payback method does not consider the time value of money.

Choice “a” is incorrect. The payback method determines the number of years that it will take for a company to recoup or be paid back for its investment. Although the payback method focuses on liquidity, project cash flows after the initial investment are not considered; thus, profitability is ignored.

Choice “b” is incorrect. The payback method determines the number of years that it will take for a company to recoup or be paid back for its investment. Although the payback method focuses on liquidity, project cash flows after the initial investment are not considered; thus, profitability is ignored.

Choice “c” is incorrect. Salvage value is specifically considered as part of payback computations because it contributes to the incoming cash flow when the asset is sold.

[mtwst113]

Yep D is correct..since the payment method doesn't take into account the time value of money, it would not account for future cash flows.

BEC | √
AUD| √
FAR| Spring 2015

[Anonymous]

I got it from Becker. It may be because I am still using V1.0. I don't want to switch to V2.0 since I already started the prior version.

Anyway, I just want to get clarification as to rather or not PBM uses salvage value in payback computations.

Thanks.

[mtwst113]

PBM does not account for the TVOM or future cash flows, that is why the PBM would not consider Salvage Value (which would be collected at the end of the asset's life)

BEC | √
AUD| √
FAR| Spring 2015

[Anonymous]

@mtw

Thanks for helping me get this straight.

But the “bailout payback” you said is nowhere found in CPA. LOL.

Never mind! It's probably from CFE, EA, EK, EKAK, whatever.

Thanks again.

[mtwst113]

I was saying I haven't heard of the Bailout method. Didn't see it on the exam either.

BEC | √
AUD| √
FAR| Spring 2015

[win2bet]

I just started studying this a couple days ago after finishing REG and damn is this a slow tedious read, this coso internal control & just simply reading past couple pages of posts in here it looks like I'm in for a battle

,

REG 68,87
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AUD 64,64, 86!

[Future Ninja]

@win2betmore i'm with you. I just started B1 and it looks like this is not a very easy subject.

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[Future Ninja]

did you know that:

SOX = REQUIRED public companies to have an Audit Committee

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[Future Ninja]

did you know that:

SOX = focuses less on strategic operations and more on the financial reporting issues impacted by audit committee's competence, ethical behavior of senior officers and adequacy of Internal Control.

AUD - 79 (expired) retaking July 28,2016
FAR - 76 expiring July 31, 2016
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[Author]

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