Cash outflows generated by capital investments include all of the following except: a) Initial investment in the capital asset. b) Increase in operating expenses. c) Increase in working capital. d) Incremental revenues.
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- The NPV method assumes that cash inflows associated with a particular investment occur when? A. only at the time of the initial Investment B. only at the end of the year C. only at the beginning of the year D. at any of these timesSaved Help Cash Inflows generated by capital Investments Include all of the followIng except: Multiple Choice incremental revenues. cost savings. reduction in the amount of required working capital. increase in operating expenses.Cash outflows generated by capital investments include all of the following except: A) depreciation expense B) transportation costs C) increased operating expenses D) increase in the required amount of working capital
- Which of the following items are required to analyze a capital expenditure? (Select all that apply.) - EBIT - the initial cash outlay - evaluation of the future cash flows - the projected future cash flows from the investmentI) In IRR method the cash flows from a project are reinvested at the cost of capital. II) IRR is the rate at which present value of cash inflows is equal to the amount of initial investment. III) It is the rate at which the NPV of the project is positive. IV) IRR method is based on concept of time value of money. V) In IRR method the cash flows from a project are reinvested at the IRR itself. Which of the following statements are incorrect about Internal rate of return (IRR): А. I, II and IV. В. Ш and V C. I, III and IV. D. I only.Which of the following methods of capital budgeting tries to equate the present value of cash inflows to present value of cash outflows? a. Net present value b. Payback period c. Internal rate of return d. Accounting Rate of return
- Explain the below elements of cash outflows: a- Purchase of New Equipment. b- Investment in Working Capital.c- Manufacturing, Operating, and Maintenance Costs.d- Leasing Expenses.e- Interest and Repayment of Borrowed Funds.f- Income Taxes.I) In IRR method the cash flows from a project are reinvested at the cost of capital. 1) II) IRR is the rate at which present value of cash inflows is equal to the amount of initial investment. III) It is the rate at which the NPV of the project is positive. IV) IRR method is based on concept of time value of money. V) In IRR method the cash flows from a project are reinvested at the IRR itself. Which of the following statements are incorrect about Internal rate of return (IRR): A. I, III and IV. B. III and V C. I, III and IV. D. I only.The incremental operating cash flows of an investment may include the following: Group of answer choices Change in revenues Change in capital outlay Change in depreciation expenses Change in operating expenses Change in tax
- Defining capital investments and the capital budgeting process Match each definition with its capital budgeting method. Methods 1. Accounting rate of return 2. Internal rate of return 3. Net present value 4. Payback Definitions a. Is only concerned with the time it takes to get cash outflows returned. b. Considers operating income but not the time value of money in its analyses. c. Compares the present value of cash outflows to the present value of cash inflows to determine investment worthiness. d. The true rate of return an investment earns.A decrease in accounts payable constitutes a/an _________ in net working capital and is considered a/an __________ to a project. Select one: a. increase; cash inflow b. increase; cash outflow c. decrease; cash inflow d. decrease; cash outflow e. increase; opportunity costTo 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.