Implementing NPV

Implementing NPV

University

12 Qs

quiz-placeholder

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Implementing NPV

Implementing NPV

Assessment

Quiz

Business

University

Medium

Created by

Asta Klimaviciene

Used 14+ times

FREE Resource

12 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The value of currently unused warehouse space that will be used as part of a new project is...

a sunk cost

an opportunity cost

an overhead expense

irrelevant to the investment decision

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Money that was/will be paid regardless of the decision to accept/reject the project is...

a sunk cost

cannibalization

an overhead expense

part of initial investment

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A decrease in the sales of a current project because of the launching of a new project is...

irrelevant to the investment decision

cannibalization

an overhead expense

a sunk cost

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following costs are relevant when estimating free cash flows for the project?

sunk cost

opportunity cost

fixed overhead cost

interest expense

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

You should choose the project with the lowest NPV in order to minimize present value of costs.

True

False

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In capital budgeting, "Concorde effect" is a term that refers to...

cannibalization

synergy

an opportunity cost

a sunk cost

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Earnings are not cash flows.

True

False

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