Quiz Ch 06 – Depreciation of Net Working Capital and Accounting Principles
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Why do accountants refrain from depreciating investments in net working capital?
Why do accountants refrain from depreciating investments in net working capital?
Which cost should NOT be considered as incremental when deciding whether to proceed with the project?
Is the NPV calculated by discounting nominal cash flows with the nominal discount rate equivalent to the NPV obtained by discounting real cash flows using which combination of discount rates?
What is the term for money that a firm has already spent or committed to spend, irrespective of whether a project is undertaken?
When assessing the decision to invest in an electric car project, which of the following costs or cash flows should be considered incremental?
How would you classify the decline in sales of existing products due to the introduction of a new product?
What could be the unintended consequences or incidental effects when Honda develops a new engine?
How should inflation be appropriately addressed in NPV calculations?
What are the principal short-term assets?
What are common errors related to working capital in estimating project cash flows?