Robert Johnson. Views in this paper are those of the authors and not necessarily those of the Reserve Bank of Australia. Authors: foxr and tulipp at domain rba.gov.au Media Office: rbainfo@rba.gov.au Abstract This paper examines whether it costs more to own a home or to rent. We argue this is a useful criterion for assessing housing overvaluation. We use a new Australian dataset, which includes prices and rents for matched properties, letting us value housing in levels. We find that if
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for the company to choose is the second project. After using the replacement chain because the projects do not have the same life the NPV gave us a clear conclusion. Even though this problem is cost based and not based on revenue you would still take the NPV project that has the lowest NPV or associated cost. Project 2 actually had positive free cash flow for the years that were not a reinvestment or replacement chain year. 2) After analysis of the firm and manufacturing the container I have
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unexpected hail storm has damaged the California almond crop and a rival company has offered Knutz 700 Kg of almonds at $10 per Kg. The offer is for the entire 700 Kg – either take all or none. The accountant notes that the original shipment of almonds cost $15,500 for 6,000 Kg or $2.75 per Kg and as such has said no to the offer. Do you agree? Support your answer with an appropriate analysis. Yes we agree with the accountant’s decision. By running a sensitivity report, the allowable increase on the
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entirely possible that the growth in income is attributed to the effective advertisement,successful management,decline in rent.It is also possible that he company capitalized advanced scientific technology,making the employee more efficient ,cutting costs and thus increasing the income.The mere fact that just because one event(increasing in revenue ) follows another(concentration in one location) is insufficient to substantiate the conclude that the first event caused the second.Without compelling evidence
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transition to improved social and environmental cost accounting using methodologies such as activity-based costing (ABC), life-cycle assessment (LCA), and full cost accounting (FCA) (Epstein, 2008). ABC assumes that activities related to products, services, and customers cause the costs. ABC first assigns costs to the activities performed by the organization (direct labor, employee training, regulatory compliance) and then attributes these costs to products, customers, and services based on a
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actions which must be done in order to realize the Target Condition, along with the individual responsible for the action and a due date. Add other items, such as cost, that are relevant to the implementation. Action Responsibility Deadline Action 1 D. Smith Oct. 1 Action 2 N. Jones Nov. 5 Action 3 M. Jordan Nov. 28 Etc. COST: no expenditures required FOLLOW-UP: Plan Actual Note the plan to measure the effectiveness of the proposed change. Indicate when it will be measured
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Questions for Fair value accounting case 1. What is fair value accounting, what are its advantages and disadvantages 2. How is it different from historical cost accounting 3. What are level 1, 2, 3 assets 4. Give a simple example of level 1, 2, 3 assets 5. Suggest 3 ways to improve reporting fair value assets. ------------------------------------------------- QUESTION 1: Fair value accounting is method of accounting the value of assets, liabilities and shareholders’ equity
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BA2_C15.qxd 9/3/05 4:25 pm Page 264 chapter 15 Contract accounts Learning objectives After you have studied this chapter, you should be able to: l describe the factors that are involved in accounting for contracts l describe how accounting records of contracts are maintained l explain the need to apply prudence when assessing profit or loss on a contract that is still in progress l describe some of the requirements of SSAP 9 relating to long-term contracts Introduction
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have done above is a “full-cost” analysis. This is in contrast to a “direct-cost” analysis that ignores overhead costs. Is full cost the right metric for job profitability and customer profitability? What assumptions are we making about the variability of overhead costs when we do a “full-cost” analysis? By allocating the overhead costs to jobs and customers there is an implicit assumption that these are variable with the cost driver. In reality, some of the overhead costs are fixed, at least in the
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flows include the effects of inflation, but real cash flows do not.) b. Is the 10 percent cost of capital a nominal or a real rate? c. Is the current NPV biased, and, if so, in what direction? Question 8 Now assume that the sales price will increase by the 5 percent inflation rate beginning after Year 0. However, assume that cash operating costs will increase by only 2 percent annually from the initial cost estimate, because over half
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