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chap10_student - Tutorial for Chapter 10 Financial...

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Tutorial for Chapter 10 Financial management (BUSS207) 1. The changes in a firm's future cash flows that are a direct consequence of accepting a project are called _____ cash flows. a. incremental b. stand-alone c. after-tax d. net present value e. erosion 2. Erosion is best described as: a. expenses that have already been incurred and cannot be reversed. b. net working capital expenses. c. the cash flows of a new project that come at the expense of a firm's existing cash flows. d. the next alternative that is forfeited when a fixed asset is utilized for a project. e. the differences in a firm's cash flows with and without a particular project. 3. Wiley Electric just purchased some MACRS 5-year property at a cost of $118,000. Which one of the following will correctly give you the book value of this equipment at the end of year 3? a. $118,000 / (1 + .20 + .32 + .192) b. $118,000 (1 .20 .32 .192) c. $118,000 (.20 + .32 + .192) d. {[$118,000 (1 .20)] (1 .32)} (1 .192) e. $118,000 /{[(1.20 / 1.32)] / 1.192}
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Tutorial for Chapter 10 Financial management (BUSS207) 4. Increasing which one of the following will increase the operating cash flow? a. erosion b. taxes c. fixed expenses d. salaries e. depreciation 5. McLain, Inc. currently produces boat sails and is considering expanding its operations to include awnings for homes and travel trailers. The company owns land beside its current manufacturing facility that could be used for the expansion. The company bought this land eight
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chap10_student - Tutorial for Chapter 10 Financial...

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