In-Class Activity 13.docx - FIN 311 In-Class Activity 13...

This preview shows page 1 - 2 out of 2 pages.

We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Intermediate Financial Management
The document you are viewing contains questions related to this textbook.
Chapter 13 / Exercise 13-11
Intermediate Financial Management
Brigham/Daves
Expert Verified
FIN 311 - In-Class Activity 13 Indicate whether the statement is true or false. 1. Estimating project cash flows is generally the most important, but also the most difficult, step in the capital budgeting process. Methodology, such as the use of NPV versus IRR, is important, but less so than obtaining a reasonably accurate estimate of projects' cash flows. a. True b. False
2. In cash flow estimation, the existence of externalities should be taken into account if those externalities have any effects on the firm's long-run cash flows.
3. Changes in net operating working capital should not be reflected in a capital budgeting cash flow analysis because capital budgeting relates to fixed assets, not working capital.
4. Typically, a project will have a higher NPV if the firm uses accelerated rather than straight-line depreciation. This is because the total cash flows over the project's life will be higher if accelerated depreciation is used, other things held constant.
5. The two cardinal rules that financial analysts should follow to avoid errors are: (1) in the NPV equation, the numerator
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Intermediate Financial Management
The document you are viewing contains questions related to this textbook.
Chapter 13 / Exercise 13-11
Intermediate Financial Management
Brigham/Daves
Expert Verified

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture