Quiz Ch 06 – Preferred Basis for Project Cash Flow Estimation
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
What is the preferred basis for estimating cash flows in project analysis according to a financial analyst?
What is the preferred basis for estimating cash flows in project analysis according to a financial analyst?
True or false: It is essential to account for all incidental effects when calculating cash flows.
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: When calculating a project’s cash flows, a financial analyst should incorporate interest and dividend payments.
True or false: In project analysis, it is recommended NOT to include opportunity costs, which signify missed opportunities.
True or false: Cash flows should be considered on an incremental basis when performing calculations.
True or false: The financial manager can sidestep the necessity to forecast inflation by analyzing in real terms.