B provide c

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Unformatted text preview: its expected at the time the project was selected is referred to as: A) the audit trail B) management C) control a postD) investment audit a cost-benefit analysis Answer: C Diff: 2 Terms: capital budgeting Objective: 7 AACSB: Reflective thinking 99) A capital tool that management can use to summarize the difference in the future net cash inflows from an intangible asset at two budgeting different points in time is referred to as: A) the accrual B) accounting rate-of-return method the net present value method C) sensitivity D) analysis the payback method Answer: B Diff: 2 Terms: net present value (NPV) method Objective: 7 AACSB: Reflective thinking 100) The focus in capital budgeting should be on: A) the tax B) consequences of different investment strategies the internal rate of return of different strategies C) expected future cash flows that differ between alternatives D) None of these answers is correct. Answer: C Diff: 2 Terms: capital budgeting Objective: 7 AACSB: Reflective thinking 101) All of the following are major categories of cash flows in capital investment decisions EXCEPT: A) the initial B) investment in machines and working capital recurring C) operating cash flows the initial D) working capital investment depreciation expense reported on the income statement Answer: D Diff: 2 Terms: capital budgeting Objective: 7 AACSB: Reflective thinking 102) An example of a sunk cost in a capital budgeting decision for new equipment is: A) an increase in working capital required by a particular investment choice B) the book value of the old equipment C) the necessary transportation costs on the new equipment D) All of these answers are correct. Answer: B Diff: 2 Terms: capital budgeting Objective: 7 AACSB: Reflective thinking 103) Depreciati on is usually not considered an operating cash flow in capital budgeting because: A) depreciation is usually a constant amount each year over the life of the capital investment B) deducting C) depreciation from operating cash flows would be counting the lump-sum amount twice depreciatio...
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