In proper capital budgeting analysis we evaluate incremental cash flows. A. accounting B. operating C. before-tax D. financing

In proper capital budgeting analysis we evaluate incremental cash flows.

A. accounting

B. operating

C. before-tax

D. financing
by

1 Answer

Answer :

B. operating
by

Related questions

The basic capital budgeting principles involved in determining relevant after-tax incremental operating cash flows require us to . A. include sunk costs, but ignore opportunity costs B. include opportunity costs, but ignore sunk costs C. ignore both opportunity costs and sunk costs D. include both opportunity and sunk costs

Description : The basic capital budgeting principles involved in determining relevant after-tax incremental operating cash flows require us to . A. include sunk costs, but ignore opportunity costs B. include ... C. ignore both opportunity costs and sunk costs D. include both opportunity and sunk costs

Last Answer : B. include opportunity costs, but ignore sunk costs

Capital budgeting decisions are based on: A. Incremental profit B. Incremental cash flows C. Incremental assets D. Incremental capital

Description : Capital budgeting decisions are based on: A. Incremental profit B. Incremental cash flows C. Incremental assets D. Incremental capital

Last Answer : B. Incremental cash flows

Interest payments, principal payments, and cash dividends are the typical budgeting cash-flow analysis because they are A. included in; financing B. excluded from; financing C. included in; operating D. excluded from; operating

Description : Interest payments, principal payments, and cash dividends are the typical budgeting cash-flow analysis because they are A. included in; financing B. excluded from; financing C. included in; operating D. excluded from; operating

Last Answer : C. included in; operating

A sound capital budgeting technique is based on: A. Cash Flows B. Accounting Profit C. Interest rate on borrowings D. Last dividend paid

Description :  A sound capital budgeting technique is based on: A. Cash Flows B. Accounting Profit C. Interest rate on borrowings D. Last dividend paid

Last Answer : A. Cash Flows

The estimated benefits from a capital budgeting project are expected as cash flows rather than income flows because . A. it is more difficult to calculate income flows than cash flows B. it is cash, not accounting income, that is central to the firm's capital budgeting decision C. this is required by the accounting profession

Description : The estimated benefits from a capital budgeting project are expected as cash flows rather than income flows because . A. it is more difficult to calculate income flows than cash flows B. it ... is central to the firm's capital budgeting decision C. this is required by the accounting profession

Last Answer : B. it is cash, not accounting income, that is central to the firm's capital budgeting decision

Which of the following is not used in capital budgeting? A. B. C. D. Time Value of Money Sensitivity Analysis Net Assets Value Method Cash Flows

Description : Which of the following is not used in capital budgeting? A. B. C. D. Time Value of Money Sensitivity Analysis Net Assets Value Method Cash Flows

Last Answer : Net Assets Value Method

Which of the following is not followed in capital budgeting? A. Cash flows principle B. Interest exclusion principle C. Accrual principle D. Post tax principle

Description : Which of the following is not followed in capital budgeting? A. Cash flows principle B. Interest exclusion principle C. Accrual principle D. Post tax principle

Last Answer : C. Accrual principle

All of the following influence capital budgeting cash flows except . A. choice of depreciation method for tax purposes B. economic length of the project C. projected sales (revenues) for the project

Description : All of the following influence capital budgeting cash flows except . A. choice of depreciation method for tax purposes B. economic length of the project C. projected sales (revenues) for the project

Last Answer : B. economic length of the project

Which of the following does not affect cash flows from a proposal: A. Salvage value B. Depreciation amount C. Tax rate change D. Method of project financing

Description : Which of the following does not affect cash flows from a proposal: A. Salvage value B. Depreciation amount C. Tax rate change D. Method of project financing

Last Answer : D. Method of project financing

Income tax paid should be shown separately as the cash flows from----------- activities. a) Financing b) Investing c) Operating d) Others

Description : Income tax paid should be shown separately as the cash flows from----------- activities. a) Financing b) Investing c) Operating d) Others

Last Answer : c) Operating

Which of the following is least likely to be part of the calculation of the terminal- year incremental net cash flow for an energy-related expansion project? A. An initial working capital investment is now returned as an additional cash inflow B. Disposal/reclamation costs C. Capitalized expenditures D. Salvage value of any sold or disposed assets

Description : Which of the following is least likely to be part of the calculation of the terminal- year incremental net cash flow for an energy-related expansion project? A. An initial working capital ... Disposal/reclamation costs C. Capitalized expenditures D. Salvage value of any sold or disposed assets

Last Answer : D. Salvage value of any sold or disposed assets

Which of the following is not incorporated in capital budgeting? A. Tax effect B. Time Value of Money C. Required rate of return D. Rate of cashdiscount

Description : Which of the following is not incorporated in capital budgeting? A. Tax effect B. Time Value of Money C. Required rate of return D. Rate of cashdiscount

Last Answer : D. Rate of cashdiscount

Risk in capital budgeting implies that the decision maker knows _ of the cash flows. A. Variability B. Certainty C. Probability D. None of these

Description : Risk in capital budgeting implies that the decision maker knows _ of the cash flows. A. Variability B. Certainty C. Probability D. None of these

Last Answer : C. Probability

To the nearest rupee, what is the net present value of a replacement project whose cash flows are -Rs.104,000; Rs.34,444; Rs.39,877; Rs.25,000; and Rs.52,800 for years 0 through 4, respectively? The firm has decided to assume that the appropriate cost of capital is 10% and the appropriate risk-free rate is 6%. A. Rs.15,115 B. Rs.26,798 C. Rs.33,346 D. Rs.48,121

Description : To the nearest rupee, what is the net present value of a replacement project whose cash flows are -Rs.104,000; Rs.34,444; Rs.39,877; Rs.25,000; and Rs.52,800 for years 0 through 4, respectively? The firm has decided to ... -free rate is 6%. A. Rs.15,115 B. Rs.26,798 C. Rs.33,346 D. Rs.48,121

Last Answer : C. Rs.33,346

As per Accounting Standard-3, Cash Flow is classified into A. Operating activities and investing activities B. Investing activities and financing activities C. Operating activities and financing activities D. Operating activities, financing activities and investing activities

Description : As per Accounting Standard-3, Cash Flow is classified into A. Operating activities and investing activities B. Investing activities and financing activities C. Operating activities and financing activities D. Operating activities, financing activities and investing activities

Last Answer : D. Operating activities, financing activities and investing activities

Risk, as it relates to working capital, means that there is jeopardy to the firm for not maintaining sufficient current assets to . A. meet its cash obligations as they occur and take advantage of prompt payment B. discounts C. support the proper level of sales and take prompt payment discounts D. maintain current and acid-test ratios at or above industry norms E. meet its cash obligations as they occur and support the proper level of

Description : Risk, as it relates to working capital, means that there is jeopardy to the firm for not  maintaining sufficient current assets to . A. meet its cash obligations as they occur and take advantage ... above industry norms E. meet its cash obligations as they occur and support the proper level of

Last Answer : D. maintain current and acid-test ratios at or above industry norms

Which of the following is true? A. Discounted cash flow analysis is the least precise of the cash flow techniques, because it does not consider the time value of money. B. NPV is the least precise of the cash flow analysis techniques, because it assumes reinvestment at the discount rate. C. Payback period is the least precise of the cash flow analysis techniques, because it does not consider the time value of money. D. IRR is the least precise of the cash flow analysis techniques, because it assumes reinvestment at the cost of capital.

Description : Which of the following is true?  A. Discounted cash flow analysis is the least precise of the cash flow techniques, because  it does not consider the time value of money. B. NPV is ... least precise of the cash flow analysis techniques, because it assumes  reinvestment at the cost of capital.

Last Answer : C. Payback period is the least precise of the cash flow analysis techniques, because it  does not consider the time value of money.

Which of the following is not a relevant cost in capital budgeting? A. Sunk Cost B. Opportunity cost C. Allocated overheads D. Both (a) and (c) above

Description : Which of the following is not a relevant cost in capital budgeting? A. Sunk Cost B. Opportunity cost C. Allocated overheads D. Both (a) and (c) above

Last Answer : D. Both (a) and (c) above

Which of the following is not a capital budgeting decision? A. Expansion programme B. Merger C. Replacement of an Asset D. Inventory Level

Description : Which of the following is not a capital budgeting decision? A. Expansion programme B. Merger C. Replacement of an Asset D. Inventory Level

Last Answer : D. Inventory Level

Capital budgeting decisions are: A. Reversible B. Irreversible C. Unimportant D. All of the above

Description : Capital budgeting decisions are: A. Reversible B. Irreversible C. Unimportant D. All of the above

Last Answer : B. Irreversible

Capital budgeting is a part of: A. Investment decision B. Working capital management C. Marketing management D. Capital structure

Description : Capital budgeting is a part of: A. Investment decision B. Working capital management C. Marketing management D. Capital structure

Last Answer : A. Investment decision

Cash inflows from a project include: A. tax shield of depreciation B. after tax operating profits C. raising of funds D. Both (a) and (b)

Description : Cash inflows from a project include: A. tax shield of depreciation B. after tax operating profits C. raising of funds D. Both (a) and (b)

Last Answer : D. Both (a) and (b)

How can a firm provide a margin of safety if it cannot borrow on short notice to meet its needs? A. Maintain a low level of current assets (especially cash and marketable securities). B. Shorten the maturity schedule of financing. C. Increasing the level of fixed assets (especially plant and equipmentD. Lengthening the maturity schedule of financing

Description : How can a firm provide a margin of safety if it cannot borrow on short notice to meet its  needs? A. Maintain a low level of current assets (especially cash and marketable securities) ... the level of fixed assets (especially plant and equipment D. Lengthening the maturity schedule of financing

Last Answer : D. Lengthening the maturity schedule of financing

The payback period is the period A. a project takes to pay back the loan taken to purchase the capital assets B. equal to the useful life of the machines C. a project takes to recover its initial cash outflow D. over which the project will be getting operating cash inflows

Description : The payback period is the period  A. a project takes to pay back the loan taken to purchase the capital assets  B. equal to the useful life of the machines  C. a project takes to recover its initial cash outflow  D. over which the project will be getting operating cash inflows

Last Answer : C. a project takes to recover its initial cash outflow

What is a cash flow table in project management? A. A table portraying inflow of cash in a project B. A table portraying outgoing expenses of a project C. It is the tool that is used to study such cash flows by breaking inflows and outflows down, usually on a monthly basis D. A table portraying debts taken for a project

Description : What is a cash flow table in project management?  A. A table portraying inflow of cash in a project  B. A table portraying outgoing expenses of a project  C. It is the tool that is used ... inflows and  outflows down, usually on a monthly basis  D. A table portraying debts taken for a project

Last Answer : C. It is the tool that is used to study such cash flows by breaking inflows and  outflows down, usually on a monthly basis

Which of the following statements is incorrect regarding a normal project? A. If the NPV of a project is greater than 0, then its PI will exceed 1. B. If the IRR of a project is 8%, its NPV, using a discount rate, k, greater than 8%, will be less than 0.C. If the PI of a project equals 0, then the project's initial cash outflow equals the PV of its cash flows. D. If the IRR of a project is greater than the discount rate, k, then its PI will be greater than 1.

Description : Which of the following statements is incorrect regarding a normal project? A. If the NPV of a project is greater than 0, then its PI will exceed 1. B. If the IRR of a project is 8%, its NPV, using ... the IRR of a project is greater than the discount rate, k, then its PI will be greater than 1.

Last Answer : D. If the IRR of a project is greater than the discount rate, k, then its PI will be greater than 1.

Identify the incorrect statement in connection with working capital management. A. Long-term funds are more expensive than short-term funds but also riskier B. The objectives of working capital management are profitability and liquidity C. Permanent current assets should be financed from long-term sources if a moderate or matching policy is adopted D. Conservative financing policies use short-term funds to finance only part of fluctuating current assets E. Aggressive financing policies increase profitability at the cost of higher risk

Description : Identify the incorrect statement in connection with working capital management. A. Long-term funds are more expensive than short-term funds but also riskier B. The objectives of ... fluctuating current assets E. Aggressive financing policies increase profitability at the cost of higher risk

Last Answer : A. Long-term funds are more expensive than short-term funds but also riskier

Which of the following statements relating to working capital financing is not correct? A. An aggressive policy uses long-term debt to finance fluctuating current assetsB. Long-term debt is less risky that short-term debt C. A conservative policy uses long-term debt to finance fixed assets D. Short-term debt is cheaper than long-term debt E. The matching principle indicates that fluctuating current assets should be financed by short-term debt

Description : Which of the following statements relating to working capital financing is not correct? A. An aggressive policy uses long-term debt to finance fluctuating current assets B. Long-term debt ... . The matching principle indicates that fluctuating current assets should be  financed by short-term debt

Last Answer : A. An aggressive policy uses long-term debt to finance fluctuating current assets

Which of the following factors does not need to be considered when formulating policies on the level and financing of working capital? A. The attitude to risk of a company’s managers B. The relative cost of short-term and long-term finance C. The availability of revenue reserves and capital reserves D. Terms of trade offered by competitors

Description : Which of the following factors does not need to be considered when formulating  policies on the level and financing of working capital? A. The attitude to risk of a company's managers B. ... C. The availability of revenue reserves and capital reserves D. Terms of trade offered by competitors

Last Answer : C. The availability of revenue reserves and capital reserves

Your firm has a philosophy that is analogous to the hedging (maturity matching) approach. Which of the following is the most appropriate form for financing a new capital investme nt in plant and equipment? A. Trade credit. B. 6-month bank notes. C. Accounts payable. D. Common stock equity

Description : Your firm has a philosophy that is analogous to the hedging (maturity matching) approach. Which of the following is the most appropriate form for financing a new capital investme nt in plant and equipment? A. Trade credit. B. 6-month bank notes. C. Accounts payable. D. Common stock  equity

Last Answer : D. Common stock  equity. 

Having defined working capital as current assets, it can be further classified according to . A. financing method and time B. rate of return and financing method C. time and rate of return D. components & time

Description : Having defined working capital as current assets, it can be further classified according to  . A. financing method and time B. rate of return and financing method C. time and rate of return D. components & time

Last Answer : D. components & time

Which of the following statements is most correct? A. For small companies, long-term debt is the principal source of external financing. B. Current assets of the typical manufacturing firm account for over half of its total assets. C. Strict adherence to the maturity matching approach to financing wD. Similar to the capital structure management, working capital management requires the financial manager to make a decision and not address the issue again for several months.ould call for all current assets to be financed solely with current liabilities.

Description : Which of the following statements is most correct? A. For small companies, long-term debt is the principal source of external financing. B. Current assets of the typical manufacturing firm account ... the financial manager to make a decision and not address the issue again for several months.

Last Answer : B. Current assets of the typical manufacturing firm account for over half of its total assets.

Which of the following would be consistent with a hedging (maturity matching) approach to financing working capital? A. Financing short-term needs with short-term funds B. Financing short-term needs with long-term debt. C. Financing seasonal needs with long-term funds. D. Financing some long-term needs with short-term funds.

Description : Which of the following would be consistent with a hedging (maturity matching) approach  to financing working capital? A. Financing short-term needs with short-term funds B. Financing short-term needs ... needs with long-term funds. D. Financing some long-term needs with short-term funds.

Last Answer : A. Financing short-term needs with short-term funds

Which of the following would be consistent with a conservative approach to financ ing working capital? A. Financing short-term needs with short-term funds. B. Financing short-term needs with long-term debt. C. Financing seasonal needs with short-term funds. D. Financing some long-term needs with short-term funds.

Description : Which of the following would be consistent with a conservative approach to financ ing  working capital? A. Financing short-term needs with short-term funds. B. Financing short-term needs with long- ... seasonal needs with short-term funds. D. Financing some long-term needs with short-term funds.

Last Answer : B. Financing short-term needs with long-term debt.

Which of the following would be consistent with an aggressive approach to financ ing working capital? A. Financing short-term needs with short-term funds. B. Financing permanent inventory buildup with long-term debt. C. Financing seasonal needs with short-term funds. D. Financing some long-term needs with short-term funds

Description : Which of the following would be consistent with an aggressive approach to financ ing  working capital? A. Financing short-term needs with short-term funds. B. Financing permanent inventory buildup with ... needs with short-term funds. D. Financing some long-term needs with short-term  funds

Last Answer : D. Financing some long-term needs with short-term  funds.

Which of the following illustrates the use of a hedging approach to financing assets? A. Temporary current assets financed with long-term liabilities. B. Permanent working capital financed with long-term liabilities. C. Short-term assets financed with equity D. All assets financed with a mixture of 50% equity and 50% long-term debt

Description : Which of the following illustrates the use of a hedging approach to financing assets? A. Temporary current assets financed with long-term liabilities. B. Permanent working capital financed with long-term ... equity D. All assets financed with a mixture of 50% equity and 50% long-term debt

Last Answer : B. Permanent working capital financed with long-term liabilities.

Which of the following is a quality management system that gives titles to specialists and requires a cost-benefit analysis? Select one: a. Lean accounting b. Business process re-engineering c. Kaizen d. Six Sigma e. Total Quality Management

Description : Which of the following is a quality management system that gives titles to specialists and requires a cost-benefit analysis? Select one: a. Lean accounting b. Business process re-engineering c. Kaizen d. Six Sigma e. Total Quality Management

Last Answer : d. Six Sigma

Unlike traditional Work Breakdown Structures (WBS), evolutionary WBSs are a. organized in a standard manner across all projects b. created in an iterative and incremental manner c. designed so one can compare the current project to past projects d. all of the above e. none of the above

Description : Unlike traditional Work Breakdown Structures (WBS), evolutionary WBSs are  a. organized in a standard manner across all projects  b. created in an iterative and incremental manner  c. designed so one can compare the current project to past projects  d. all of the above  e. none of the above

Last Answer : d. all of the above

___________ can be used as a standard to measure the efficiency of an economy 1. Cash reserve ratio 2. Exchange rate ratio 3. Incremental capital output ratio 4. Profit ratio 5. None of these

Description : ___________ can be used as a standard to measure the efficiency of an economy 1. Cash reserve ratio 2. Exchange rate ratio 3. Incremental capital output ratio 4. Profit ratio 5. None of these

Last Answer : Incremental capital output ratio

Following is(are) the responsibility(ies) of the project manager. (A) Budgeting and cost control (B) Allocating resources (C) Tracking project expenditure

Description : Following is(are) the responsibility(ies) of the project manager. (A) Budgeting and cost control (B) Allocating resources (C) Tracking project expenditure

Last Answer : (C) Tracking project expenditure

Following is(are) the responsibility(ies) of the project manager. (A)Budgeting and cost control (B)Allocating resources (C)Tracking project expenditure (D)All of the above

Description : Following is(are) the responsibility(ies) of the project manager. (A)Budgeting and cost control (B)Allocating resources (C)Tracking project expenditure (D)All of the above

Last Answer : (D)All of the above

Cost budgeting can be best described by which of the following? 1. The process of developing the future trends along with the assessment of probabilities, uncertainties, and inflation that could occur during the project 2. The process of assembling and predicting costs of a project over its life cycle 3. The process of establishing budgets, standards, and a monitoring system by which the investment cost of the project can be measured and managed 4. The process of gathering, accumulating, analyzing, reporting, and managing the costs on an on- going basis

Description : Cost budgeting can be best described by which of the following? 1. The process of developing the future trends along with the assessment of probabilities,  uncertainties, and inflation that  could ... of gathering, accumulating, analyzing, reporting, and managing the costs on an on- going basis

Last Answer : 3. The process of establishing budgets, standards, and a monitoring system by which the  investment cost of the project can be measured and managed

A time-phased budget that project managers use to measure and monitor cost performance. A. Cost Baseline B. Cost Budgeting C. Cost Estimating D. Cost Variance

Description :  A time-phased budget that project managers use to measure and monitor cost performance. A. Cost Baseline B. Cost Budgeting C. Cost Estimating D. Cost Variance

Last Answer : A. Cost Baseline

Trend analysis is significant for a) Forecasting and budgeting b) Profit planning c) Capital rationing d) None of the above

Description : Trend analysis is significant for a) Forecasting and budgeting b) Profit planning c) Capital rationing d) None of the above

Last Answer : a) Forecasting and budgeting

n project financing ,sensitivity analysis is applied because a) almost all the cash flow methods involve uncertainty b) of the need to assess how sensitive the project to changes in input parameters c) what if one or more factors are different from what is predicted d) all the above situation

Description : n project financing ,sensitivity analysis is applied because a) almost all the cash flow methods involve uncertainty b) of the need to assess how sensitive the project to changes in input parameters c) what if one or more factors are different from what is predicted d) all the above situation

Last Answer : d) all the above situation

Interest paid by the government on the loans raised is called - (1) Debt Servicing (2) Deficit Financing (3) Discounted Budgeting (4) Bridge-loan

Description : Interest paid by the government on the loans raised is called - (1) Debt Servicing (2) Deficit Financing (3) Discounted Budgeting (4) Bridge-loan

Last Answer : (1) Debt Servicing Explanation: Debt service is the amount of money required to make payments on the principal and interest on outstanding loans, the interest on bonds. or the principal of maturing bonds. An ... or company unable to make such payments is said to be "unable to service one's debt."

The major functions of SHS Wholesale include all of the following EXCEPT A)selling to the final consumer. B)warehousing, shipping, and product handling. C)financing and budgeting. D)marketing research and information systems. E)inventory control and data processing.

Description : The major functions of SHS Wholesale include all of the following EXCEPT A)selling to the final consumer. B)warehousing, shipping, and product handling. C)financing and budgeting. D)marketing research and information systems. E)inventory control and data processing.

Last Answer : A)selling to the final consumer.

Interest paid by the government on the loans raised is called (1) Debt Servicing (2) Deficit Financing (3) Discounted Budgeting (4) Bridge-loan

Description : Interest paid by the government on the loans raised is called (1) Debt Servicing (2) Deficit Financing (3) Discounted Budgeting (4) Bridge-loan 

Last Answer :  Debt Servicing