Quiz Ch 09 – T/F Working Capital and Cash Flow
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: Cash inflows are generated when investing in working capital, like investing in plant and equipment.
True or false: Cash inflows are generated when investing in working capital, like investing in plant and equipment.
True or false: Adjusting working capital downward leads to an increase in cash flows.
True or false: At the project’s conclusion, a disinvestment in working capital occurs, leading to positive cash flow from the sale of inventories and collection of accounts receivable.
During what time frame will the acquisition of the $135,000 machine tool, which is to be depreciated with 100% bonus depreciation in the first year and has no salvage value, affect the project’s tax payments?
What is the tax treatment of the sales price of a depreciable asset when it is ultimately sold?
What is the most likely course of action if the NPV of an investment proposal turns negative due to the allocation of a portion of the corporation president’s salary?
How are investment projects influenced by depreciation expense?
When can changes in net working capital take place?
What is the appropriate approach for managing overhead costs in capital budgeting?
What does a tax shield represent in a firm’s financial context?