Ready to test your Knowledge?
Try out our new practice tests completely free!
exam preparation banner icon

Fundamentals Of Corporate Finance Study Set 21

Business

Quiz 10 :

Making Capital Investment Decisions

Quiz 10 :

Making Capital Investment Decisions

search
arrow
Incremental costs should be included in the analysis of a project
Free
True False
Answer:

Answer:

True

arrow
Sunk costs are considered cash flows of a project.
Free
True False
Answer:

Answer:

False

arrow
An offer to purchase the patent rights would normally be included in the final cash flow of a project that entailed the development and sale of a new product.
Free
True False
Answer:

Answer:

True

arrow
An increase in taxes is an example of an incremental cash flow.
True False
Answer:
arrow
You build a Taco Bell just down the street from your McDonalds franchise would likely NOT cause erosion.
True False
Answer:
arrow
For the purpose of performing capital budgeting analysis, cash flows must be incremental.
True False
Answer:
arrow
The loss of sales due to a new product which you recently introduced is an example of erosion.
True False
Answer:
arrow
You begin selling coffee in new, small-sized pouches alongside your regular-sized coffee cans would likely NOT cause erosion.
True False
Answer:
arrow
A decrease in the cost of goods sold is an example of an incremental cash flow.
True False
Answer:
arrow
To fully understand the effects of a proposed project, total cash flows should be developed as part of the project's pro forma statements.
True False
Answer:
arrow
The recovery of the money spent for inventory related to the project would normally be included in the final cash flow of a project that entailed the development and sale of a new product.
True False
Answer:
arrow
Interest expense causes operating cash flow to differ from net income.
True False
Answer:
arrow
Sunk costs should be included in the analysis of a project.
True False
Answer:
arrow
The loss of sales due to increased competition in the product market is an example of erosion.
True False
Answer:
arrow
Selling existing equipment at 10% less than book value would create a source of cash.
True False
Answer:
arrow
For the purpose of performing capital budgeting analysis, cash flows must be after-tax.
True False
Answer:
arrow
The loss of sales due to a new product recently introduced by your competitor is an example of erosion.
True False
Answer:
arrow
A gas station owner expands floor space to make room for a convenience store would likely NOT cause erosion.
True False
Answer:
arrow
The money spent to obtain a patent on the new product design would normally be included in the final cash flow of a project that entailed the development and sale of a new product.
True False
Answer:
arrow
An increase in accounts receivable is an example of an incremental cash flow.
True False
Answer:
Showing 1 - 20 of 363