Because new investment opportunities can become available throughout a company’s fiscal year, companies frequently a. Wait until the end of the year to make capital budgeting decisions b. Reserve some capital for use later in the year c. Ignore opportunities that occur after the initial capital budgeting decisions d. Require that the alternatives considered during capital budget decision making at the beginning of the year include every possibility that may occur during the year

Which of the following are key reasons for firms making capital budgeting decisions? Regulatory Expansion Renewal Replacement All of these

Should the following be included in Sneakers 2013 capital budgeting cash flow projection? why or why not? Building a factory/installing of equipment? R&D costs Cannibilization of other sneaker costs interest costs changes in current assets and current liabilities taxes COGS advertising and promotion expenses depreciation charges

Capital budgeting whose returns are expected to extend beyond one year requires an analysis of some factors.What are those factors and explain

The managers in a firm have decided to move the company's headquarters from a rented space to a new building that the company will purchase. This is an example of Multiple Choice a cash flow decision. a capital budgeting decision. a net working capital decision. a capital structure decision. a short-term financing decision.

Your firm is evaluating a capital budgeting project. The estimated cash flows appear below. The board of directors wants to know the expected impact on shareholder wealth. Knowing that the estimated impact on shareholder wealth equates to net present value (NPV), you use your handy calculator to compute the value. What is the project's NPV? Assume that the cash flows occur at the end of each year. The discount rate (i.e., required rate of return, hurdle rate) is 17.4%. (Round to nearest penny) Year 0 cash flow -132,000 Year 1 cash flow 52,000 Year 2 cash flow 31,000 Year 3 cash flow 42,000 Year 4 cash flow 39,000 Year 5 cash flow 18,000

. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Delta’s expected future cash flows. To answer this question, Cold Goose’s CFO has asked that you compute the project’s payback period using the following expected net cash flows and assuming that the cash flows are received evenly throughout each year.   Complete the following table and compute the project’s conventional payback period. For full credit, complete the entire table. (Note: Round the conventional payback period to two decimal places. If your answer is negative, be sure to use a minus sign in your answer.)   Year 0 Year 1 Year 2 Year 3 Expected cash flow -$6,000,000…

In the textbook's capital budgeting examples, the book assumes that the firm recovers all of its working capital invested into a project.   In the real world, is this a reasonable assumption?  Justify your position and discuss when it would

3. Using both Payback and NPV results, which projects, if any, would yourecommend McGloire should fund? Justify your answer and include a criticalassessment of two nonfinancial qualitative factors that could affect the investment

Your firm is evaluating a capital budgeting project. The estimated cash flows appear below. The board of directors wants to know the expected impact on shareholder wealth. Knowing that the estimated impact on shareholder wealth equates to net present value (NPV), you use your handy calculator to compute the value. What is the project's NPV? Assume that the cash flows occur at the end of each year. The discount rate (i.e., required rate of return, hurdle rate) is 17.5%. (Round to nearest penny) Year 0 cash flow -115,000 Year 1 cash flow 60,000 Year 2 cash flow 47,000 Year 3 cash flow 48,000 Year 4 cash flow 51,000 Year 5 cash flow 27,000