True or false: Given a level of investment in net working capital, that same investment must be recovered at some time in the future.
Group of answer choices
True
False
True:
Investment in net working capital will be recovered at some point of time in future, normally at the end. working capital investments are normally in terms of investment in inventories, sundry debtors or any short term assets which can be realized after a particular period of time. that investment will be realized fully
True or false: Given a level of investment in net working capital, that same investment must...
When conducting a capital budgeting analysis, the changes in net working capital through time are usually assumed to be caught back up in the last period (terminal cash flow) on an after-tax basis Group of answer choices True False
You are considering a new investment. Revenues, costs and spending on Net Working Capital are given in the table below. The tax rate is 35%. All net working capital is recovered at the end of the project. Year 1 Year 2 Year 3 Year 0 Investment $30,000 Sales Revenue Operating Costs Depreciation Net Working Capital Spending $400 $16,000 $3,000 $10,000 $450 $17,000 $3,200 $10,000 $350 $18,000 $3,400 $10,000 ? Suppose that the discount rate is 11.5 percent. What is the...
You are considering a new investment. Revenues, costs and spending on Net Working Capital are given in the table below. The tax rate is 35%. All net working capital is recovered at the end of the project. Year 1 Year 2 Year 3 Year o Investment $30,000 Sales Revenue Operating costs Depreciation Net Working Capital Spending $400 $16,000 $3,000 $10,000 $450 $17,000 $3,200 $10,000 $350 $18,000 $3,400 $10,000 ? Suppose that the discount rate is 10.1 percent. What is the...
True or false? Every random sample of the same size from a given population will produce exactly the same confidence interval for μ. Group of answer choices True. Different random samples may produce different x values, resulting in different confidence intervals. False. Different random samples may produce different x values, resulting in the same confidence intervals. False. Different random samples may produce different x values, resulting in different confidence intervals. True. Different random samples will produce the same x values,...
For a typical capital investment project, the bulk of the investment-related cash outflow occurs: During the initiation stage of the project During the operation stage of the project Either during the initiation stage or the operation stage During neither the initiation stage nor the operation stage Evenly during all three stages: initiation, operation, and final disposal The time value of money is explicitly considered in which of the following capital budgeting methods? Payback method Net present value (NPV) method Operating...
Other things the same, as the price level falls, the exchange rate rises. A rise in the exchange rate leads to a decrease in net exports. Group of answer choices True False
Increases in net working capital (NWC) are reflected as _______________________ in a capital budgeting proposal? Group of answer choices if they are related to the project under consideration, they are not reflected inflows none of the above are correct outflows
True or False? An increase in the interest rate reduces (i) the desired level of capital stock and (ii) investment.
Investment in human capital is very similar to investing in physical capital. True or false? Explain your answer.
Five years ago, ABC Company invested $58,919 in a machinery. The investment in net working capital was $4,440 which would be recovered at the end of the project. Today, ABC Company is selling the machinery for $20,157. The book value of the machinery is $13,580. The tax rate is 37 percent. What are the terminal cash flows in Year 5?