To calculate net present value of a project with normal cash flows, find the present value of the expected cash flows, and subtract A)  retained earnings.   B)  the cost of the investment.   C)  the factor loading.   D)  the payback period.

Q: Breakeven cash inflow refers to ________.   the minimum level of cash inflow necessary for a…

A: Net present value is one of the discounted techniques of capital budgeting which is used to measure…

Q: When evaluating projects for consideration in capital budgeting identifying the appropriate cash…

A: A cash flow forecast is a breakdown of the money that will be coming in and out of your business.

Q: The cash flows (CFs) of project A which you are considering to invest are given below. If the cost…

A: Net Present value is the sum of present value of future cashflows

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: Is it worth the effort to estimate daily project cash flows?  Would doing so be helpful in the…

A: Cashflows are usually estimating yearly and then discounted at an appropriate discount rate

Q: What is the typical discount rate used with the Net Present Value (NPV) when project risk is the…

A: a) The rate of return the shareholders expected to get, or the rate at which the company borrows,…

Q: nternal rate of return   For the project shown in the following​ table, calculate the internal rate…

A: IRR is rate at which net present value of the cash flows will be equal to 0 it is calculated using…

Q: Under which one of the capital budgeting, projects is the sum of all present values of all cash…

A: Capital Budgeting: Capital budgeting is a measurement of the project investment or any purchase of…

Q: How is the payback period used in capital budgeting? Multiple Choice As a measure of a project's…

A: The payback period is the amount of time it takes for you to recover the cost of your investment. In…

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: When considering a project’s Operating Cash Flows, where are Financing        Costs included?

A: Financing cost is the cost of the debt taken by the company which would be used for financing the…

Q: Which of the following should NOT be included as a cash flow in initial, operating or terminal cash…

A: There are various different costs associated while taking a capital budgeting decision.

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 the cash flows over the life of the project are…

A: IRR is the required rate of return for the project to have zero Net Present value.

Q: When estimating the cash flows on a given project, firms should include expenses from previous…

A: Cashflows on a project include all kinds of cash inflows and outflows related to the project from…

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: Explain why net operating working capital is included in a capital budgeting analysis andhow it is…

A: The net operating working capital is included in a capital budgeting analysis andrecovered at the…

Q: Which of the following statements is CORRECT? Assume that the project being considered has normal…

A: Statement A: FALSE Because project NPV is found by discounting the cash inflows at a discount rate…

Q: The duration of time within which the investment made for the project will be recovered by the net…

A: Payback Period:-It is a period required to cover up the cost of investment. In simple words, it is a…

Q: Depending on the cash flow assumption, should the project must use continuous cash flow? why?

A: In continuous discounting and continuous cash flows, the assumption is that the cash stream happens…

Q: fe of the project. Which one of the following statements is correct with respect to this…

A: NPV Method assumes that all the cash flows are reinvested at the company's Cost of Capital. IRR…

Q: Which of the following is NOT a major step in the capital budgeting process?   a. generating…

A: Capital budgeting process is decisions on longer term investment planning and involves complex…

Q: In a capital budgeting analysis, why are interest charges not deducted when a project’s cash flows…

A: Capital Budgeting:  The process to evaluate an alternative based on the estimated future benefits…

Q: In computing the present value of an investment in equipment, the present value of the residual…

A: Net Present value = Present value of future cash flows + Present value of terminal cash flow -…

Q: Illustrate the conventional payback period, annual project cash flow over the life of project, and…

A: The illustration is shown below:

Q: The comparison of the expected future streams of earnings from a project, with the immediate and…

A: Capital Budgeting: Evaluation of  investments and  huge amount of expenses in order to obtain the…

Q: Explain how to find the value of a capital budgeting project given its cost, its expected annualnet…

A: Capital budgeting is a method of analyzing the investment decision which is supposed to be taken by…

Q: The internal rate of return is the: discount rate that makes present value of cash inflows equal to…

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: Companies often use several methods to evaluate the project’s cash flows and each of them has its…

A: Payback period: This method shows, in how many years company is able to recover its initial…

Q: Which of the following statements is CORRECT? Assume that the project being considered has normal…

A: It refers to the rate of return that is computed by the company to make a decision of selection of a…

Q: Assuming that a project has already been evaluated using the following techniques, the evaluation…

A: There will be no effect on change in residual value of project, if the payback period is less than…

Q: Which of the following methods of capital budgeting uses the average annual profits for evaluation…

A: Capital budgeting is the process that a business uses to determine which proposed fixed asset…

Q: Calculate internal Rate of Return of the project. Should the project be accepted? If reinvestment…

A: Internal rate of return is the rate at which the present value of cash inflows are equal to present…

Q: or a typical capital investment project, the bulk of the investment-related cash outflow occurs:…

A: A Capital Investment Project:- It is a long-term investment project which would give the company…

Q: How do we develop the project cash flows, after taxes, over the life of the project?

A: Cash flows of the project include both cash inflows and cash outflows. To develop cash flows…

Q: Describe and explain the significance of each of the following: payback period, internal rate of…

A: Payback Period: A project’s payback period is the number of periods required for the project’s cash…

Q: Concerning incremental project cash flow, this is a cost one would never count as a cash flow of the…

A: The increased operating cash flow that a company obtains as a result of taking on a new project is…

Q: a. What is the typical discount rate used with the Net Present Value (NPV) when project risk is the…

A: a) The rate of return the stockholders anticipate to get, or the rate at which the firm borrows,…

Q: The ____ of an investment is the period of time for the ____ to equal the initial cash outlay.   a.…

A: The payback period refers to the amount of time it takes to recover the cost of an investment.…

Q: The length of time required to cover the initial outlay of the investment in a project is referred…

A: There are different methods of capital budgeting which help a manager take decision regarding the…

Q: How can we determine the project cash flows over the project life?

A: Cash Flow Statement is a part of the Financial Statement of a company. It literally means a…

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.