2. The annual annuity stream of payments with the same present value as a project's costs is called the project's _____ cost. A. incrementalB. sunkC. opportunityD. erosionE.equivalent annual Difficulty level: Easy Topic: EQUIVALENT ANNUAL COST Type: DEFINITIONS 6-30
Chapter 06 - Making Capital Investment Decisions 3. A cost that has already been paid, or the liability to pay has already been incurred, is a(n): Difficulty level: Easy Topic: SUNK COSTS Type: DEFINITIONS 4. The most valuable investment given up if an alternative investment is chosen is a(n): Difficulty level: Easy Topic: OPPORTUNITY COSTS Type: DEFINITIONS 5. The cash flows of a new project that come at the expense of a firm's existing projects are called: Difficulty level: Easy Topic: EROSION COSTS Type: DEFINITIONS 6-31
Chapter 06 - Making Capital Investment Decisions 6. A pro forma financial statement is one that: A.projects future years' operations.B. is expressed as a percentage of the total assets of the firm.C. is expressed as a percentage of the total sales of the firm.D. is expressed relative to a chosen base year's financial statement.E. reflects the past and current operations of the firm. Difficulty level: Easy Topic: PRO FORMA FINANCIAL STATEMENTS Type: DEFINITIONS 7. The depreciation method currently allowed under U.S. tax law governing the accelerated write-off of property under various lifetime classifications is called _____ depreciation. Difficulty level: Easy Topic: MACRS DEPRECIATION Type: DEFINITIONS 8. The cash flow tax savings generated as a result of a firm's tax-deductible depreciation expense is called the: Difficulty level: Easy Topic: DEPRECIATION TAX SHIELD Type: DEFINITIONS 6-32
Chapter 06 - Making Capital Investment Decisions 9. The cash flow from projects for a company is computed as the: Difficulty level: Medium Topic: CASH FLOW Type: DEFINITIONS
You've reached the end of your free preview.
Want to read all 74 pages?