CAPITAL BUDGETING

Front

Which of the following is not a time-adjusted method for ranking investment proposals?

• NPV Method
• Payback method
• Internal rate of return
• All of these are time adjusted methods

Back

Payback method

Front

Cash flow can be said to equal

Back

operating income less taxes plus depreciation

Front

Capital budgeting is primarily concerned with

Back

evaluating investment alternatives

Front

Assume a corporation has earnings before depreciation and taxes of Php100,000, depreciation of Php40,000, and that it has a 30 percent tax bracket. What are the after-tax cash flows for the company?

Back

Php82,000

Front

When a firm has no capital rationing constraint and investment alternatives are not mutually exclusive, what should the firm do?

Back

Accept all investment proposals that have a positive net present value.

Front

If projects are mutually exclusive

Back

the selection of one alternative precludes the selection of other alternatives

Front

The _________ assumes returns are reinvested at the cost of capital.

Back

internal rate of return

Front

Which capital budgeting technique considers incremental accounting income rather than cash flows? Options: Net present value, internal rate of return, accounting rate of return, Cash payback period.

Back

accounting rate of return

Front

The difference between the present value of cash inflows and the present value of cash outflows associated with a project is known as

Back

net present value of the project

Front

A project whose acceptance prevents the acceptance of another project is known as?

Back

a mutually exclusive project