Explanation

• In accounting, an economic event occurs when a transaction is recorded.
• An economic event is a business occurrence that has a financial effect.
• It can change the company’s assets, liabilities, or owner's equity.
• Examples include sales, purchases, payments, and receipts.
• Recording the transaction allows the event to be reflected in the accounting records.

Last verified on 12-08-2026

Explanation

• The model that uses management, accounting, and econometrics is called a Management Science Model.
• Management science applies mathematical and analytical techniques to solve management problems.
• It uses quantitative information from areas such as management, accounting, and economics/econometrics.
• These models support planning, decision-making, and resource allocation.

Last verified on 12-08-2026

Explanation

• A Profitability Index (PI) of 0.9 means the project's NPV is negative, and the project should be rejected.
• The Profitability Index (PI) compares the present value of future cash inflows with the initial investment.
• PI > 1: NPV is positive → Accept the project.
• PI = 1: NPV is zero → Indifferent between accepting and rejecting.
• PI < 1: NPV is negative → Reject the project.

Last verified on 12-08-2026

Explanation

Required return = Dividend Yield + Growth Rate

= (4/100) + 5% = 4% + 5% = 9%.

Last verified on 12-08-2026

Explanation

For an ordinary annuity: PV = PMT × [1 − (1 + r)⁻ⁿ] / r

PV = 4,000 × [1 − (1.08)⁻²⁰] / 0.08 ≈ Rs. 39,272.

Last verified on 12-08-2026