Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Which of the following methods can be used to analyze the return on investment (ROI) for investments in securities?

The Dividend Discount Model (DDM)

The Straight-Line Depreciation Method

The Allowance Method for Bad Debts

The LIFO Inventory Method

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Verified step by step guidance

Understand the concept of Return on Investment (ROI): ROI measures the profitability of an investment relative to its cost. It is typically expressed as a percentage and helps investors evaluate the efficiency of their investments.

Identify the methods listed in the problem: The Dividend Discount Model (DDM), Straight-Line Depreciation Method, Allowance Method for Bad Debts, and LIFO Inventory Method. Analyze each method to determine its relevance to ROI analysis.

Evaluate the Dividend Discount Model (DDM): This model is used to value a stock based on the present value of its expected future dividends. Since it focuses on returns from dividends, it is directly related to ROI analysis for investments in securities.

Assess the Straight-Line Depreciation Method: This method is used to allocate the cost of an asset evenly over its useful life. It is not relevant to ROI analysis for investments in securities, as it pertains to fixed assets rather than financial investments.

Review the Allowance Method for Bad Debts and LIFO Inventory Method: The Allowance Method is used to estimate uncollectible accounts receivable, and the LIFO Inventory Method is used for inventory valuation. Neither method is applicable to ROI analysis for investments in securities.