Which of the following factors should be included in the cash flows used to estimate a project's NPV?
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Option 'D' is correct
The end-of-project recovery of any working capital required to operate the project should be included in the cash flows used to estimate a project's Net Present Value.
Which of the following factors should be included in the cash flows used to estimate a...
7. Which of the following cash flows are relevant incremental cash flows for a project that you are currently considering investing in? A. Research and Development expenditures you have made B. The cost of a marketing survey you conducted to determine demand for the proposed project C. Interest payments on debt used to finance the project D. The tax savings brought about by the project's depreciation expense
A company is considering a new project. The Chief Financial Officer (CFO) plans to calculate the project's NPV. Which of the following factors should the CFO include in the cashflows when estimating the relevant cash flows? a. Effects of the project on other divisions of the firm, but only if those effects lower the project's own direct cash flows. b. All sunk costs that have been incurred relating to the project. c. All interest expenses on debt used to help...
When firms make capital budgeting decisions, they should concern themselves with incremental cash flows, not net income, when evaluating projects. To determine the incremental cash flows associated with a capital project, an analyst should include all of the following except: The project's financing costs The project's depreciation expense Changes in net working capital associated with the project The project's fixed-asset expenditures O Indirect cash flows often affect a firm's capital budgeting decisions. However, some of these indirect cash flows are...
When firms make capital budgeting decisions, they should concern themselves with incremental cash flows, not net income, when evaluating projects. To determine the incremental cash flows associated with a capital project, an analyst should include all of the following except: O Changes in net working capital associated with the project The project's financing costs The project's depreciation expense The project's fixed-asset expenditures Indirect cash flows often affect a firm's capital budgeting decisions. However, some of these indirect cash flows are...
3. Identifying incremental cash flows Aa Aa E When firms make capital budgeting decisions, they should concern themselves with incremental cash flows, not net income, when evaluating projects. To determine the incremental cash flows associated with a capital project, an analyst should include all of the following except: The project's fixed-asset expenditures Changes in net working capital associated with the project The project's depreciation expense The project's financing costs Indirect cash flows often affect a firm's capital budgeting decisions. However,...
Which of the following is a basic principle when estimating a project's cash flows? Cash flows should be measured on a pretax basis accounting for the risk of individual projects Cash flows should ignore depreciation because it is a noncash charge Only direct effects of a project should be included in cash flow calculations Cash flows should be measured on an incremental basis D 4. In estimating the net investment, an outlay that has already been made is known as...
D l Question 1 When calculating incremental cash flows, we should include O interest O financing expenses Q sunk costs opportunity costs | Question 2 2 pts The cash flows that occur just because of a new project are called O marginal cash flows o project cash flos e additional cash flows O incremental cash flows 2 pts D | Question 3 Sun Corp. uses a discount rate of 6% for below-average risk projects, 8% for average-risk projects, and 10%...
(Discounted payback period) Gio's Restaurants is considering a project with the following expected cash flows: Year Project Cash Flow (millions) $(210) AWNO If the project's appropriate discount rate is 11 percent, what is the project's discounted payback period? The project's discounted payback period is years. (Round to two decimal places.) (Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows: Project A Project B Year Cash Flow...
Ch 13: Assignment - Capital Budgeting: Estimating Cash 3. Identifying incremental cash flows When firms make capital budgeting decisions, they should concern themselves with incremental cash flows, not net income, when evaluating projects. To determine the incremental cash flows associated with a capital project, an analyst should include all of the following except: The project's depreciation expense The project's fixed-asset expenditures The project's financing costs Changes in net working capital associated with the project Indirect cash flows often affect a...
12. You are provided a chart representing the cash flows expected from a coffee shop project in a fetail store. You remember from vour finance course that only incremental cash flows Should be included in the chart as relevant items for capital budgeting decision. When you examine the chart, you have noted the following points. a. Comment on each as relevant or not and, b. briefly explain why in one or two sentences. (10p) The coffee shop project chart includes...