4- When calculating the after-tax operating cash flows in capital budgeting analysis, which of the following are reflect...
4- When calculating the after-tax operating cash flows in capital budgeting analysis, which of the following are reflected?
Group of answer choices
additional (incremental) expenses
all of the above
additional (incremental) revenue
additional (incremental) costs
additional (incremental) depreciation
Homework Answers
When calculating the after-tax operating cash flows in capital budgeting analysis, the following are reflected:-
b) all of the above
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4- When calculating the after-tax operating cash flows in capital budgeting analysis, which of the following are reflect...
1. Which of the following must be added to Operating Income when calculating Free Cash Flow?...
1. Which of the following must be added to Operating Income when calculating Free Cash Flow? Group of answer choices Depreciation Principal payments Interest payments Capital expenditures Tax payments 2. Replacement Value is a variation of: Group of answer choices Market-Comparable Valuation Method Earning Capitalization Method Present Value of Future Cash Flows Method Market Capitalization Method Asset-based Valuation Method 2. Replacement Value is a variation of: Group of answer choices Market-Comparable Valuation Method Earning Capitalization Method Present Value of Future...
Assignment Capital Budgeting problem with After-tax Cash Flows Bell Manufacturing is considering purchasing a new labeling...
Assignment Capital Budgeting problem with After-tax Cash Flows Bell Manufacturing is considering purchasing a new labeling machine. The equipment will cost $180,000 and have a 5-year useful life. Expected salvage value is $20,000. Tax regulations permit the following depreciation schedule: Percent Deductible Year 1 20% 2 32 3 19 4 15 14 The company's tax rate is 30% and its cost of capital is 4%. The equipment is expected to generate the following cash savings and cash expenses: Cash Expenses...
Which of the following is correct? A. Capital budgeting analysis for expansion and replacement projects is...
Which of the following is correct? A. Capital budgeting analysis for expansion and replacement projects is esentially the same because the types of cash flows involved are the same. B. The replacement decision involves analysis of two independent projects where the relevant cash flows include the initial investment, additiona depreciation, and the terminal value. C. The change in working capital for a project is the difference between the required increase in current assets and the spontaneous increase in current liabilities...
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%...
Assignment Capital Budgeting problem with After-tax Cash Flows Bell Manufacturing is considering purchasing a new labeling...
Assignment Capital Budgeting problem with After-tax Cash Flows Bell Manufacturing is considering purchasing a new labeling machine. The equipment will cost $180,000 and have a 5-year useful life. Expected salvage value is $20,000. Tax regulations permit the following depreciation schedule: Percent Deductible Year 1 20% 2 32 3 19 4 15 14 The company's tax rate is 30% and its cost of capital is 4%. The equipment is expected to generate the following cash savings and cash expenses: Cash Expenses...
When conducting a capital budgeting analysis, the changes in net working capital through time are usually assumed to be...
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
After-Tax Cash Flows For each of the following independent situations, compute the net after-tax cash flow...
After-Tax Cash Flows For each of the following independent situations, compute the net after-tax cash flow amount by subtracting cash outlays for operating expenses and income taxes from cash revenue. The cash outlay for income taxes is determined by applying the income tax rate to the cash revenue received less the cash and noncash (depreciation) expenses. A B C Cash revenue received $110,000 $525,000 $275,000 Cash operating expenses paid 64,000 385,000 165,000 Depreciation on tax return 14,000 32,000 25,000 Income...
TEGRATED CASE ALLIED FOOD PRODUCTS CAPITAL BUDGETING AND CASH FLOW ESTIMATION Allied Food Products is considering...
TEGRATED CASE ALLIED FOOD PRODUCTS CAPITAL BUDGETING AND CASH FLOW ESTIMATION Allied Food Products is considering expanding into the fruit juice business with a new fresh lemon juice product. Assume that you were recently hired as assistant to the director of capital budgeting, and you must evaluate the new project. The lemon juice would be produced in an unused building adjacent to Allied's Fort Myers plant: Allied owns the building, which is fully depreciated. The required equipment would cost $200,000,...
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,...
Assignment Capital Budgeting problem with After-tax Cash Flows Bell Manufacturing is considering purchasing a new labeling machine. The equipment will cost $180,000 and have a 5-year useful life. Expected salvage value is $20,000. Tax regulations permit the following depreciation schedule: Percent Deductible Year 1 20% 2 32 3 19 4 15 14 The company's tax rate is 30% and its cost of capital is 4%. The equipment is expected to generate the following cash savings and cash expenses: Cash Expenses...
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%...
Assignment Capital Budgeting problem with After-tax Cash Flows Bell Manufacturing is considering purchasing a new labeling machine. The equipment will cost $180,000 and have a 5-year useful life. Expected salvage value is $20,000. Tax regulations permit the following depreciation schedule: Percent Deductible Year 1 20% 2 32 3 19 4 15 14 The company's tax rate is 30% and its cost of capital is 4%. The equipment is expected to generate the following cash savings and cash expenses: Cash Expenses...
TEGRATED CASE ALLIED FOOD PRODUCTS CAPITAL BUDGETING AND CASH FLOW ESTIMATION Allied Food Products is considering expanding into the fruit juice business with a new fresh lemon juice product. Assume that you were recently hired as assistant to the director of capital budgeting, and you must evaluate the new project. The lemon juice would be produced in an unused building adjacent to Allied's Fort Myers plant: Allied owns the building, which is fully depreciated. The required equipment would cost $200,000,...
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,...
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