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Flashcards in Chp4-Quiz Deck (10):
1

To determine cash flow depreciation is

added to net income

2

Which of the following items is a cost in a capital budgeting incremental analysis?

major overhaul

3

The internal rate of return is the discount factor necessary to make an investment's NPV greater than one.

FALSE

4

***Which of the following discounted cash flow techniques matches the present value with the future value so that the net result is zero?

IRR

5

***The ITC in capital budgeting analysis is

A benefit

6

***The payback method accounts for the time value of money.

FALSE

7

***In theory, the residual value is the present value of future cash flows beyond the time horizon.

TRUE

8

NPV reports in present dollar terms how much value will be added to a company as a result of making a particular investment.

TRUE

9

A technique that is widely used to identify incremental benefits and costs is

differential analysis

10

***The depreciation used in capital budgeting analysis is

MACRS