Advocates of financial modeling of product design projects argue that: Financial analysis focuses on measurable quantities only. Financial analysis brings discipline and control to the product development process. Sufficiently rigorous financial analysis can accurately forecast the product's profit potential. Financial analysis is as solid as the assumptions that go into the model. Financial analysis nurtures innovation and creativity.

If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. there are two approaches to use to account for flotation costs. the first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investment cost. because the investment cost is increased, the project's expected return is reduced so it may not meet the firm's hurdle rate for acceptance of the project. the second approach involves adjusting the cost of common equity as follows: . the difference between the flotation-adjusted cost of equity and the cost of equity calculated without the flotation adjustment represents the flotation cost adjustment. quantitative problem: barton industries expects next year's annual dividend, d1, to be $1.90 and it expects dividends to grow at a constant rate g = 4.3%. the firm's current common stock price, p0, is $22.00. if it needs to issue new common stock, the firm will encounter a 6% flotation cost, f. assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. what is the flotation cost adjustment that must be added to its cost of retaine

According to herman, one of the differences of managing a nonprofit versus a for-profit corporation is

As a general rule, when accountants calculate profit they account for explicit costs but usually ignorea. certain outlays of money by the firm.b. implicit costs.c. operating costs.d. fixed costs.