Provide a brief explanation of why depreciation of capital assets is considered in determining potential net income from an investment, but not included in determining the net cash flow of an investment.

Q: Demonstrates the difference between depreciation costs as expenses and the cash flow generated by…

A: Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income…

Q: How can we determine the period necessary to recover both the capitalinvestment and the cost of…

A: The Payback period (PBP) determines how long it would take a company to recover the investment. PBP…

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: Provide a general model for determining relevant cash flows associated withcapital investment…

A: A General model for determining relevant cash flows associated with capital investment projects.

Q: Which of the following is excluded when projecting future cash flows for the purpose of determining…

A: As per International Accounting Standard 36   Impairment of assets When projecting future cash flows…

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: What are the after effects (both short term and long term) of capitalizing the cable costs of…

A: Capital expenditures (CapEx) are cash outlays made by a company to purchase, improve, and maintain…

Q: How can you explain working capital management? Explain different policies/approaches to manage…

A: The working capital is the capital that is used in the business for successful running of day to day…

Q: A capital expenditure would be: Group of answer choices added to the cost of the asset ignored…

A: The Capital expenditure is that expenditure which is incurred for long term benefits. The benefits…

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: Distinguish between the following measures of invested capital, and briefly explain when each should…

A:

Q: how can depreciation be a cash flow?

A: Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its…

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: 2. Which of the following best explains the meaning of the term 'capital expenditure'. Capital…

A: Capital expenditure is the long term expenditure of the company.

Q: How to determining optimal capital structure?

A: Optimal Capital Structure: It is the best debt and equity mix financing that minimizes the cost of…

Q: How is working capital handled in the calculation of cash flows from a capital investment? Is it…

A: Working capital or net working capital is equals to firm’s current assets minus current liabilities,…

Q: Why must the Engineers consider the effective use of fixed capital assets?

A: Engineer indulge in numerous process of decision-making such as manufacturing, financing, and…

Q: Explain why the cost of capital is measured on an after-tax basis why is use of a weighted average…

A: This question consists of two subquestions i.e.  (a) Explain why the cost of capital is measured on…

Q: What is a capital asset?  Why do we care about the treatment of assets as either capital or…

A: Capital assets is an assets which are generally not meant for sale but for investment purpose which…

Q: Why should the capital expenditures be capitalized?

A: Capital Expenditures:   Capital expenditures are those which provide future economic benefits by…

Q: he purpose of depreciation expense

A: Depreciation is a measure of wearing out of assets from its use efflux over time or obsolete through…

Q: The cost of capital depends primarily on the use of the funds, not the source. True or False

A: The cost of capital is the minimum return required by the company to satisfy their equity…

Q: Distinguish different categories of cash flows to be considered in an equipment-replacement decision…

A:

Q: An investment property is considered to generate cash flows that are?

A: Investment property can be defined as the property consisting of land or building which is not…

Q: What is the first impact on asset turnover of promptly expensing a cash outlay compared to…

A: The Answer :

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: 1. How do we decide whether to capitalize (record as an asset) or expense a particular cost? 2.…

A: ANSWER   Cost: The cost of the long-lived assets refers to all the expenditures made in order to…

Q: Real property held for investment is a capital asset. True or false

A: Real Estate Property Held for Investment is A capital Assets.   Real estate property held for…

Q: Identify if the following financial inputs are relevant or irrelevant and motivate why you have…

A: In financial decision making, relevant costs are costs that will be affected by the decision at…

Q: Explain the difficulties for determining the cost of capital in the short term decision making.

A: Introduction: Capital structure relates to financing of the overall activities and development of a…