At the end of a project’s life, we will recover any initial changes in ________ from the beginning of the project. A) working capital B) depreciation C) taxes D) start-up costs ANSWER Answer: A
Date: September 19th, 2020
To project the appropriate anticipated cash flow for a project, we must put all cash flow knowledge together. This includes ________ of the incremental cash flow. A) both the amount and timing B) the amount C) the timing D) the amount but not the timing ANSWER Answer: A
Date: September 19th, 2020
We can use the ________ to estimate a project’s operating cash flows each period. A) modified income statement format B) income statement format C) balance sheet format D) annual report format ANSWER Answer: A
Date: September 19th, 2020
Northwest Co. purchases an asset for $6,000. This asset qualifies as a seven-year recovery asset under MACRS. Benson has a tax rate of 30%. The seven-year expense percentages for years 1, 2, 3, 4, 5, and 6 are 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, and 8.93%, respectively. If the asset is sold at the end of […]
Date: September 19th, 2020
Once the operations for a new project are up and running, we need to estimate the cash flow from ________. A) sunk costs B) flotation costs C) depreciation D) operations ANSWER Answer: D
Date: September 19th, 2020
We assume no ________ costs for a project if a competitor is also introducing a competing product. A) sunk B) buyback C) erosion D) corrosion ANSWER Answer: C
Date: September 19th, 2020
In general, the greater a firm’s current assets relative to its short-term obligations, the better able it will be to pay its bills as they come due. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Too much investment in current assets reduces firm’s profitability, whereas too little investment in current assets increases the risk of not being able to pay debts as they come due. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
To mitigate deadweight costs associated with the shareholder-management principal-agent conflict, some investors become major shareholders and attempt to influence management to act in the best interest of shareholders. This is an example of: a. a takeover. b. shareholder activism. c. packing the board. d. principal intervention. ANSWER B
Date: September 19th, 2020
A firm is said to be insolvent when its total assets is less than its total liabilities and stockholders’ equity. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
