In computing the present value of an investment in equipment, the present value of the residual value should be added to the cash inflows Group of answer choices False True

Q: True or False In the net present value method, market research costs incurred in the past should be…

A: An investment appraisal depicts a financial analysis of a capital project that requires a huge…

Q: Relevant cash inflows and outflows in a discounted cash flow analysis are the differences in…

A: True

Q: The present value of cash flows in Investment A is lower than the present value of cash flows in…

A: Discount rate is very important FACTOR in calculating the present value of cash flow. Particularly…

Q: The time value of money concept is given consideration in long-range investment decisions by  Group…

A: The time value of money concept is given consideration in long-range investment decisions by :

Q: _____isthe difference between the gross present value of the benefits of that action and the amount…

A: The difference between the present value of benefits and amount of investment is the key evaluation…

Q: Under the indirect method of estimating project cash flows, an increase in trade creditors in a…

A: Cash flow statement is divided into three activities i.e. cash flow from operating activities, cash…

Q: Which of the following statements is true for historical cost valuations? (Select one or more)…

A: According to accounting principles, a historical cost is a method of valuing assets in which the…

Q: The length of time required for an investment to generate cash flows sufficient to recover its…

A: Net Present Value It is the amount of present value of the cash inflows net of cash outflows. It…

Q: The internal rate of return method assumes that a project's cash flows are reinvested at the:

A: The internal rate of return is a financial analysis tool that is used to estimate the profitability…

Q: A project is rejected under the net present value method when: a. The percentage return is greater…

A: Capital budgeting is a process used to gauge if an investment should be made in a particular project…

Q: All of the followings are True when the net present value method is used to choose between two…

A: Net present value is the excess of present value of cash flows over cash outflows or initial…

Q: Which of the following cash flows are not considered in the calculation of the annual cash-flow for…

A: Proceeds from selling an old asset which is being replaced by a new asset It does not impact the…

Q: Which of the following should NOT be included in the cash flows for project analysis? Opportunity…

A: Explanation of the given option: 1. opportunity cost : It is the cost to be borne for not choosing…

Q: Actual cash value is defined as Replacement cost Coinsurance amount Insurable value Depreciated…

A: Actual Cash Value (ACV) is a method of valuing insured property of business. It is not equal to…

Q: Which of the following statements is False regarding the payback period method: DA Use as a tool in…

A: Statement -D is false.As payback period method is Non- discounting cash flow criteria…

Q: Which of the following statements are true regarding the payback period of an investment? It does…

A: Answer: The correct option is (4) All of the above.

Q: The NPV method determines how much the present value of cash inflows exceeds the present value of…

A: The amount of difference between the PV (present value) of cash inflows and cash outflows is called…

Q: Prepare a cashflow forecast, Use investment appraisal techniques to calculate Net Present Value…

A: Net Present Value=(Present Value of Cash Inflows-Present Value of Cash Outflows)

Q: Discuss the notions of conventional and nonconventional cash flows in capital budgeting. Which…

A: Conventional Cash Flows: These are cash flows in a project where the pattern of initial investment…

Q: I) In IRR method the cash flows from a project are reinvested at the cost of capital. II) IRR is the…

A: Capital budgeting is referred as the process of decision making which is used by companies to…

Q: The Payback method takes the initial investment and divides it by the accelerated depreciation per…

A: Payback Period : The Payback Period is a Period in which a project repay its initial cost of…

Q: Which of the following phrases best describes the term " actual cash value"? a. market value b.…

A: Actual cash value is the actual amount at which the property could be sold and it is usually less…

Q: (c) Why is net present value considered to be a superior method of evaluating the cash flows from a…

A: The concepts of capital budgeting tools can be used here to answer the questions. There are…

Q: Relative Valuation links an asset's value to its inherent qualities, such as its ability to produce…

A: ( Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Net present value and the payback period are examples of discounted cash flow methods used in…

A: Various methods used in capital investment decisions are Pay back period, Accounting Rate of…

Q: In calculating the incremental after-tax cash flows associated with a particular investment, the…

A: Under Capital budgeting incremental after-tax cash flows associated with a particular investment…

Q: True or false   DCF Approach Model examines the price of "similar" assets in relation to a common…

A: 1. DCF Approach Model examines the price of "similar" assets in relation to a common variable, such…

Q: The cash payback technique: a. considers cash flows over the life of a project. b. may be useful…

A: The cash payback is a technique which identifies the time period required to recover the cost of the…

Q: How does depreciation enter into the calculation of operating cash inflows? Explain theu…

A: Depreciation allocates expenses related to assets over their useful life and it assists in reducing…

Q: Calculate the present value and future value of an uneven cash flow stream.

A: A stream of cash flow is uneven  when all the amounts in the series of cash flows are unequal .i.e.,…

Q: Which of the following statements related to the internal rate of return (IRR) are correct? I. The…

A: All Four options are correct.

Q: Explain how sunk costs and cannibalisation affect the determination of an investment’s incremental…

A: Introduction : . Simply put, sunk costs refers to the costs that has already been incurred and the…

Q: The rate of return that equates the present value of cash inflows and outflows is the: A. hurdle…

A: Introduction: Capital budgeting is an investment criterion or decision making mechanism for…

Q: Discuss a scenario where it would be appropriate to use one the present value of cash flow technique…

A: Cash flow techniques are one of the most accepted method in capital budgeting , cash flows are  the…

Q: In calculating Net Present Value (NPV), which one of the following is not an example of a relevant…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following statements is true with regard to cash flows resulting from financing costs?…

A: Financing cost: In the context of borrowing money, financing costs are defined as the interest and…

Q: The periodic cash flows associated with an investment project include which of the following O…

A: solution concept periodic cash flow The term cash flow means the cash flow which arises every period…

Q: When a capital investment is expected to provide unequal annual cash inflows, the payback period…

A: Payback period: It can be defined as the time that investment takes before it starts generating…

Q: Discounted cash flow capital budgeting techniques do not O take into consideration an unconventional…

A: Discounted cash flow method is a vital capital budgeting technique. It has been explained in the…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.