6. Which of the following is NOT a relevant cash flow and thus should NOT be reflected in the analysis of a capital budgeting project? a. Changes in net operating working capital. b. Shipping and installation costs for machinery acquired. c. Cannibalization effects. d. Opportunity costs. e. Sunk costs that have been expensed for tax purposes.

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: Which of the following is an advantage of using the payback period method for project selection?…

A: The objective of the question is to identify the advantage of using the payback period method for…

Q: Capital budgeting is the decision making process used in the acquisition of long term physical…

A: It is a decision making process which is used by the firm about the acquisition of long term…

Q: According to Richard & Green law, acquiring inputs with long term benefits is called: a. Working…

A: Option Meaning a Working capital management defined as managing the working capital in efficient…

Q: Which of the following cash flows should not be considered when evaluating a project? Changes in…

A: Following cashflows should not be considered when evaluating a project-

Q: What are the four types of cash flows MOST common in a capital budgeting valuation? Group of answer…

A: The four types of cash flows most common in a capital budgeting valuation are:A) Capital…

Q: Why is capital cost allowance used instead of depreciation expense in capital budgeting?

A: Capital cost allowance: is an annual deduction which can be claimed on depreciable asset while…

Q: Which of the following cash flows should be excluded from a net present value evaluation of an…

A: NPV can be calculated by subtracting present value of cash inflow from present value of cash…

Q: The importance of cash flow management when evaluating proposals for capital expenditure?

A: All investments in capital assets are expected to earn a return, which is evaluated by comparing the…

Q: Is capital budgeting decisions can be reversed

A: In capital budgeting we review different projects to determine their financial feasibility and…

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

A: Sunk Costs is that cost which was already incurred on the project before starting the Project these…

Q: One of the following methods are not a method to evaluate projects: Return on investment Discounted…

A: Capital budgeting: It implies to the process of evaluating different projects based on their…

Q: capital investment:

A: Capital investment refers to acquiring physical assets for the further use of achieving long-term…

Q: What refers to the way the company’s assets are financed and includes both long-term as well as…

A: The company raises the finance from various sources, one of them is common stock. The investor who…

Q: If net present value for a project is negative, then____. a. IRR is equal to Cost of capital b. IRR…

A: Net present value is the difference between the present value of cashflows discounted at the cost of…

Q: Which of the following items is irrelevant in determining the relevant cost of acquisition in…

A: Capital budgeting: capital budgeting is a decision making method done by management accountants in…

Q: When converting accounting profits to cash flows, we broadly deal with depreciation and working…

A: cash flow Statement:  An organization's total cash inflows from current activities and outside…

Q: How can we determine after-tax cash flows for an investmenta project with only operating and…

A: Discount rate is the weighted average cost of capital (WACC) which is used in the project.  WACC is…

Q: Which of the following methods of capital budgeting indicates the time period required to recover…

A: Capital budgeting is a process of identifying high return project or projects which will increase…

Q: When evaluating a potential capital budgeting decision, fixed asset expenditures O should be…

A: Capital budgeting is financial technique which helps in decision making on the basis of future cash…

Q: What are the likely effects of a policy in which a company fails to adjust for difference in risk…

A: The cost of capital is a critical financial concept for companies. It represents the return expected…

Q: Which of the following scenario shows the financial manager’s financing function? a. Prioritizing…

A: Financial manager's functions include: a) Getting financing at lower cost b) Planning and allocating…

Q: operating cash flows of a project:   includes tax.   none of the others is correct   are equal…

A: Operating  cash flow are cash flow  related to normal operations of Business. so these are the cash…

Q: The cost of capital used in capital budgeting should reflect the average cost of the various sources…

A: Cost of capital reflects long term funds like debt and equity yo acquire assets

Q: I answered true but why answer say false please provide reason why

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Q: Which of the following statements regarding investment is correct? O a. Housing construction is…

A: An investment seems to be an asset or thing purchased with the intention of earning income or rising…

Q: True or false:  The levels of fixed-cost assets and funds that management selects affect the…

A: In Funds management there are managers who manage the funds and based on their skills and talents…

Q: Which of the following decisions do NOT influence the cash from operating activities slide?  Which…

A: Operating Activities are company core business activities such as manufacturing , distributing ,…

Q: Although depreciation is not a cash flow item, it plays an important role in the calculation of cash…

A: Cash flow (CF) is a measurement of how much money a company generates through regular business…

Q: Explain the difference between capital assets, capital investments, and capital budgeting.

A:

Q: The focus in capital budgeting is on   a. Favorable and unfavorable variance   b. Expenses under…

A: Capital budgeting :- It is process in which different long term investment proposal are evaluated…

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.