Quiz 10 F301
NI+D
WHich of the following is a correct method for computing the operating cash flow of a project assuming that the interest expense is equal to zero
sunk cost
Which of the following costs was incurred in the past and cannot be recouped
financial statements showing projected values for future time periods
Which one of the following best describes pro forma financial statements
I. Purchase of $1400 of parts inventory needed to support the project IV. $6500 of equipment needed to commence the project
ALl of the following are related to a proposed project. Which of these should be included at time zero?
can affect the cash flows of a project every year of the project's life
Changes in the net working capital requirements:
amount of tax that is saved because of the depreciation expense
Depreciation tax shield is best defined as the
sunk cost
G&L Plastic Molders spent $1200 last week repairng a machine. This week the company is trying to decide if the machine could be better utilized if they assigned it to a proposed project. When analyzing the project the $1200 should be treated as what type of cost?
$216,000 x (1-.20-.32)
Morris Motors just purchased some MACRS 5 year property at $216,000. Which one of the follwing will correctly give you the book value of this equipment at the end of year 2?
Interest expense
Operating cash flow for a project should exclude?
I be compiled on a standalone basis II include all the incremental cash flows related to the project III generally exclude interest expense IV include all project related fixed asset acquisitions and disposals
Pro forma statements for a proposed project should:
incremental cash flows
The difference between a firm's future cash flows if it accepts a project and the firm's future cash flows if it does not accept the project is referred to as the projects
stand-alone principle
The fact that a proposed project is analyzed based on the project's incremental cash flows is the assumption behind which one of the following principles
