Part 1 When calculating incremental cash flows, we should exclude _____. A. sunk costs B. side...
Part 1
When calculating incremental cash flows, we should exclude _____.
A. sunk costs
B. side effects
C. opportunity costs
D. taxes
Homework Answers
When calculating incremental cash flows, we should exclude:-
A. sunk costs
Sunk costs are irrelevant as they have already been incurred.
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Part 1
When calculating incremental cash flows, we should exclude
_____.
A. sunk costs
B. side...
1. When determining relevant cash flows for project evaluation, we should _____. a. discount interest expenses...
1. When determining relevant cash flows for project evaluation, we should _____. a. discount interest expenses to the present b. subtract interest expenses from EBIT c. ignore interest expenses d. add back in interest expenses after subracting taxes 2. When calculating incremental cash flows, we should exclude _____. a. side effects b. taxes c. opportunity costs d. sunk costs 3. When calculating incremental cash flows, we should include _____. a. interest b. sunk costs c. financing expenses d. opportunity costs...
D l Question 1 When calculating incremental cash flows, we should include O interest O financing...
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%...
Which of the following is a basic principle when estimating a project's cash flows? Cash flows...
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...
Problem 08.014 - Calculating incremental cash flows For the cash flows shown, determine the incremental cash...
Problem 08.014 - Calculating incremental cash flows For the cash flows shown, determine the incremental cash flow between machines B and A (a) in year o. (b) in year 3, and (c) in year 6. Machine First Cost, $ AOC, $ per Year Salvage Value, $ Life, Years 18,000 1,600 5,000 3 -25,000 -400 6,000 6 a) The incremental cash flow between machines B and A in year O is $ b) The incremental cash flow between machines B and...
11. Using an example of each, explain sunk costs and opportunity costs. Which of these costs...
11. Using an example of each, explain sunk costs and opportunity costs. Which of these costs should be included in incremental cash flows and which should be excluded?
When firms make capital budgeting decisions, they should concern themselves with incremental cash flows, not net...
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...
3. Identifying incremental cash flows Aa Aa E When firms make capital budgeting decisions, they should...
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,...
When firms make capital budgeting decisions, they should concern themselves with incremental cash flows, not net...
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...
Which of the following are considered relevant cash flows in the analysis of a project? I:...
Which of the following are considered relevant cash flows in the analysis of a project? I: sunk costs II: opportunity costs III: negative side effects IV: financing costs V: taxes Group of answer choices III and IV II and III II, III and V II and IV I and II
1. What factors should the financial manager include when computing the incremental free cash flows of...
1. What factors should the financial manager include when computing the incremental free cash flows of an investment decision. Multiple. A) Sunk costs B) Opportunity costs C) Project externalities D) Financing costs 2. Metal Ltd is looking at producing power boards. The company is considering alternative production methods. The costs (in million) and lives associated with each are: Model Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Model 1 -$90 -$2 -$2 -$2 Model 2 -$80...
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%...
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...
Problem 08.014 - Calculating incremental cash flows For the cash flows shown, determine the incremental cash flow between machines B and A (a) in year o. (b) in year 3, and (c) in year 6. Machine First Cost, $ AOC, $ per Year Salvage Value, $ Life, Years 18,000 1,600 5,000 3 -25,000 -400 6,000 6 a) The incremental cash flow between machines B and A in year O is $ b) The incremental cash flow between machines B and...
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...
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,...
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...
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