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?
What is the term for the cost of a resource that may impact an investment decision even when there is no actual cash transaction?
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.