Which of the following cash flows are not considered in the calculation of the annual cash-flow for a capitalinvestment proposal?Incremental costs.O Taxes.O Depreciation on the project.Proceeds from selling an old asset which is being replaced by a new asset.Change in revenue.

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

Answered: Which of the following cash flows are…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 10QTD

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Similar questions

Which of the following cash flows should not be considered when evaluating a project? Changes in working capital Shipping and installation costs Sunk costs Opportunity costs Externalities
which of the following should not be included in the cash flows for project analysis? Opportunity costs side effects or erosion sunk costs operating cash flows for all years The initial investment in net working capital
4. What factors should be considered when estimating a new business' NINV? Is it any different for an asset replacement project. 5. Why is depreciation, a noncash expense, considered when estimating a project's net cash flows? 6. What are the potential tax consequences of selling an old asset in an asset replacement investment decision?
To get a project's after-tax cash flow, you must subtract depreciation as though it is an expense from the taxable income and then add it back again as though it is a positive cash flow to get the final net cash flow.a. Trueb. False
Which of the following is NOTa relevant cash flow and thus should not be reflected in the analysis of a capital budgeting project? a. Shipping and installation costs. b. Cannibalization effects. c. Opportunity costs. d. Sunk costs that have been expensed for tax purposes. e. Changes in net working capital. Please explain your answer for better understanding.
How can we determine the period necessary to recover both the capitalinvestment and the cost of funds required to support the investment?
Depreciation is a noncash expense: why is it considered when estimating a project net cash flows?
Which of the following is an advantage of using the payback period method for project selection? The payback period method considers the time value of money The payback period method considers accounting income The payback period method shows when funds will be available for reinvestment The payback period method ignores the time value of money
Which methods of evaluating a capital investment project ignore the time value of money? Multiple Choice Net present volue and accounting rate of retum, Accounting rate of return and internal rate of return. Internal rate of return and payback perlod.
Is after-tax cashflow still the cash inflow even if it is the sum of NOPAT and depreciation in the project?
The modified internal rate of return (MRR) test is designed to address a limitation associated withthe use of the internal rate of return (IRR). What is that limitation?a) Working capital requirementb) Income taxesc) Reinvestment rated) Depreciation expense
4) Which of the following cash flows should be excluded from a net present value evaluation of an investment project? A) An increase in fixed costs due to leasing a new building for the project. B) An increase in debtors and stocks expected to occur as a result of undertaking the project. C) The purchase cost of materials that can be used in the project but that the company uses regularly in other operations. D) Interest charges on a loan taken out to finance the project

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Which of the following cash flows are not considered in the calculation of the annual cash-flow for a capital investment proposal? Incremental costs. O Taxes. O Depreciation on the project. Proceeds from selling an old asset which is being replaced by a new asset. Change in revenue.