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

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
by

1 Answer

Answer :

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

decision
by

Related questions

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

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

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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

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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

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

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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

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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

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

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Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return. B. As long as you are not dealing with mutually exclusive projects, capital rationing, or unusual projects having multiple sign changes in the cash-flow stream, the internal rate of return method can be used with reasonable confidence. C. The internal rate of return does not consider the time value of money. D. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculated

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Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return. B. As long as you are not dealing with mutually exclusive projects, capital rationing, or unusual projects having multiple sign changes in the cash-flow stream, the internal rate of return method can be used with reasonable confidence. C. The internal rate of return does not consider the time value of money. D. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculated.

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Last Answer : D. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculated.

Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return B. As long as you are not dealing with mutually exclusive projects, capital rationing, or unusual projects having multiple sigD. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculatedn changes in the cash-flow stream, the internal rate of return method can be used with reasonable confidence. C. The internal rate of return does not consider the time value of money.

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Last Answer : D. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculated.

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

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

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

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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

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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

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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.

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

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

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

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Political unrest, budget overruns, size and complexity of the project Answer: B (8)Decision trees are best used for : 1. Determining the interaction of the amount at stake and the expected value 2. Association of the probabilities with the risk events 3. An illustration of how to see the interactions between decisions and the associated events 4. A flow chart which determines the standard deviation of the risk event

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Last Answer : 3. An illustration of how to see the interactions between decisions and the associated events

Function points are used to measure the estimated _____ of a project. a. complexity b. effort required c. program size d. time required

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Which of the following project baselines provides the basis for measurement of the expected cash flow against requirements over time and is often displayed as an S curve? Select one: a. Schedule baseline b. Cost performance baseline c. Scope baseline d. Plan baseline e. Initiation baseline

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

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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

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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

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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

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The amount of current assets required to meet a firm's long-term minimum needs is referred to as working capital. A. permanent B. temporary C. net D. gross

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Determine which of the following method of accounting maybe used in the calculation of income under the head- “Profits and gains from business and profession” or “Income from other sources”? a) Mercantile system of accounting b) Cash system of accounting c) Both of the above maybe used d) casual accounting

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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

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

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A profitability index (PI) of .92 for a project means that . A. The project's costs (cash outlay) are (is) less than the present value of the project's benefits B. The project's NPV is greater than zero C. The project's NPV is greater than 1 D. The project returns 92 cents in present value for each current rupee invested (cost)

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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

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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

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)Which of the following is NOT one of the primary needs for good project scheduling? 1. Cutting costs and reducing time 2. Decreasing the time required for decision making 3. Eliminating idle time 4. Developing better trouble shooting procedures.

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The probability of completing the project can be estimated based upon the ____ . (A) Uniform distribution curve (B) Normal distribution curve. (C) U-shaped distribution curve (D) None of the above

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The probability of completing the project can be estimated based upon the . (A)Uniform distribution curve (B)Normal distribution curve. (C)U-shaped distribution curve (D)None of the above

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Last Answer : (B)Normal distribution curve.

Using typical industry standards for estimating project time schedules, the estimated analysis phase would be 10 person-months for a systems project where the planning phase was completed in 7.5 person-months.

Description : Using typical industry standards for estimating project time schedules, the estimated  analysis phase would be 10 person-months for a systems project where the planning phase was completed in 7.5 person-months.

Last Answer : Ans: True

Using typical industry standards for estimating project time schedules, the estimated analysis phase would be 25 person-months for a systems project where the planning phase was completed in 30 person-months.

Description : Using typical industry standards for estimating project time schedules, the estimated  analysis phase would be 25 person-months for a systems project where the planning phase was completed in 30 person-months.

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When using a function point estimation worksheet, there are 14 factors that impact the complexity of a project. These factors include _____. a. data communications, time tradeoffs, and estimated effort b. end-user efficiency, data communications, and reusability c. performance and programming language d. reports printed and PCA e. x-rays, extensibility, and operational conversion

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. When estimating project time schedules using industry standards, the estimated project completion time for a systems project would be _____ person-months if the actual planning phase were completed in 6 person-months. a. 30 b. 40 c. 17.14 d. 9 e. 50

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Which one of the following illustrates why effective project management is beneficial to an organization? a. It utilizes resources as and when required under direction of a project manager. b. It advocates employing a consultancy firm which specializes in managing change. c. It recommends using only highly skilled people in the project team. d. It ensures that the chief executive is accountable for the achievement of the defined benefits.

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Last Answer : a. It utilizes resources as and when required under direction of a project manager.

One of the greatest weaknesses of systems consulting firms is that they try to apply estimates and methodologies that they have developed over time and applied to other projects, most of which are very different from the current project.

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Last Answer : Ans: False

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.

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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.

An Expected Monetary Value (EMV) of $100000 on a potential project event in the project means which of the following? Select one: a. A number that can be ignored b. An opportunity that must be explored c. Actual losses on the event d. Actual investment returns on the event e. A threat that must be considered to minimize the project risk

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Last Answer : b. An opportunity that must be explored

When a project manager starts to plan a new project budget, the cost of which project management process group is expected to be lowest? Select one: a. Initiating b. Executing c. Monitoring and controlling d. Closing e. Planning

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Last Answer : d. Closing