Find the what is wrong with the executive statement

Assignment Help Finance Basics
Reference no: EM131146511

Sometimes capital investments with a positive net present value have a negative impact on earnings. For example, investing in certain types of research and development may result in a large expense at the time of investment with the benefits coming a few years (or more) later. Suppose an executive tells you, "I will not approve any capital investment that decreases current earnings, no matter how high the net present value. If our earnings go down, our stockholders are hurt because stock prices will fall, and our managers will be hurt because their bonuses are tied to earnings." What is wrong with the executive's statement?

Reference no: EM131146511

Questions Cloud

Determine gingers gift tax liability for 2015 : Determine Ginger's gift tax liability for 2015 if she and Greg elect gift splitting and Greg gave their son Stevie stock valued at $80,000 during 2015.
Explain why it is vital to meet each learner needs : Develop a statement addressed to Cindy Kramer and upper management explaining to them the importance of learning styles, adult learning, and how to make it work so that older employees can learn comfortably alongside younger ones.
How positive conflict can increase the overall productivity : XYZ Corporation has been investigating how positive conflict can increase the overall productivity of a project team. They have asked you to take a new project team and use this methodology in its compilation and execution. The team is comprised of o..
Determine the payback period for the new machine : Problem A Hamlet Company is considering the purchase of a new machine that would cost USD 300,000 and would have an estimated useful life of 10 years with no salvage value. The new machine is expected to have annual before-tax cash inflows of USD 100..
Find the what is wrong with the executive statement : If our earnings go down, our stockholders are hurt because stock prices will fall, and our managers will be hurt because their bonuses are tied to earnings." What is wrong with the executive's statement?
Define two of the regulatory bodies the pol falls under : List four forms of basic recommended personal protective equipment (PPE) that can be used when collecting specimens from patients. Why is proper hand washing an important consideration when working in the laboratory and with patients?
Using creativity and innovation as leadership strategy : Many successful organizations are using creativity and innovation as a leadership strategy to differentiate their organization and position them for success. Select a recent article from current events (past 90 days) that highlights an organization t..
Construct the routing tables at each of the nodes : Construct the routing tables at each of the five nodes - Write a function computeDijkstra(sourceID,C)' which takes as inputs the source node ID and the link cost matrix and returns the final best cost vector and the final predecessor vector.
Determine the equilibrium position and the frequency : The schematic diagram of a centrifugal governor is shown in Fig. 2.70. The length of each rod is l, the mass of each ball is m, and the free length of the spring is h. If the shaft speed is ω determine the equilibrium position and the frequency fo..

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd