Quiz Ch 06 – Repayment of Principal in an Interest-Only Loan
Fundamentals of Corporate Finance
Ross, Westerfield, and Jordan
13th Edition
How is the principal repaid in an interest-only loan?
How is the principal repaid in an interest-only loan?
What is the most accurate representation of net working capital?
Why is it important to include net working capital (NWC) in project cash flows?
True or false: The equivalent annual cash-flow technique is mainly employed when comparing projects with identical durations.
True or false: Estimating project cash flows often encounter errors, with working capital being one of the most prevalent sources.
True or false: It is essential to account for all incidental effects when calculating cash flows.
True or false: The MACRS system assigns most industrial equipment to the 10-15 year classes for depreciation.
True or false: Sunk costs, which are past expenditures unaffected by the decision to accept or reject a project, should be disregarded.
True or false: Large U.S. corporations commonly employ two separate accounting records—one for stockholders and another for the Internal Revenue Service.
True or false: Utilizing the equivalent annual cash-flow approach, a financial analyst can evaluate the viability of replacing an existing machine with a new one and identify the most favorable timing for the replacement.