Chapter 13 - Capital Budgeting
146. (Ignore income taxes in this problem.) Pal Corporation is contemplating purchasing
equipment that would increase sales revenues by $438,000 per year and cash operating
expenses by $258,000 per year. The equipment would

Chapter 13 - Capital Budgeting
119. (Ignore income taxes in this problem.) Tranter, Inc., is considering a project that would
have a ten-year life and would require a $1,200,000 investment in equipment. At the end of
ten years, the project would terminate

Chapter 13 - Capital Budgeting
41. (Ignore income taxes in this problem.) Charley has a typing service. He estimates that a
new computer will result in increased cash inflow $1,600 in Year 1, $2,000 in Year 2 and
$3,000 in Year 3. If Charley's required ra

Chapter 13 - Capital Budgeting
7. The project profitability index is used to compare the internal rates of return of two
companies with different investment amounts.
True False
8. Preference decisions attempt to determine which of many alternative investm

Chapter 13 - Capital Budgeting
44. (Ignore income taxes in this problem.) The following data pertain to an investment
proposal:
The working capital would be released for use elsewhere when the project is completed. What
is the net present value of the pro

Chapter 13 - Capital Budgeting
100. The net present value of the proposed project is closest to:
A. $30,155
B. $47,139
C. $2,462
D. $25,585
(Ignore income taxes in this problem.) Rushforth Manufacturing has $90,000 to invest in
either Project A or Project

Chapter 13 - Capital Budgeting
35. (Ignore income taxes in this problem.) Sam Weller is thinking of investing $70,000 to
start a bookstore. Sam plans to withdraw $15,000 from the business at the end of each year for
the next five years. At the end of the

Chapter 13 - Capital Budgeting
26. The length of time required to recover the initial cash outlay for a project is determined by
using the:
A. discounted cash flow method.
B. the payback method.
C. the net present value method.
D. the simple rate of retur

Chapter 13 - Capital Budgeting
(Ignore income taxes in this problem.) Gull Inc. is considering the acquisition of equipment
that costs $480,000 and has a useful life of 6 years with no salvage value. The incremental net
cash flows that would be generated

Chapter 13 - Capital Budgeting
18. The discount rate must be specified in advance for which of the following methods?
A. Option A
B. Option B
C. Option C
D. Option D
19. An investment project for which the net present value is $300 would result in which o

Chapter 13 - Capital Budgeting
103. The present value of the annual cost savings of $30,000 is closest to:
A. $18,630
B. $183,163
C. $150,000
D. $113,730
104. The net present value of the proposed project is closest to:
A. $14,905
B. -$6,270
C. $9,255
D.

Chapter 13 - Capital Budgeting
59. Blanding Company is considering several investment proposals, as shown below:
Using the project profitability index, the ranking would be:
A. D, B, A, C
B. D, C, A, B
C. C, D, A, B
D. C, A, D, B
60. (Ignore income taxes

Chapter 13 - Capital Budgeting
47. (Ignore income taxes in this problem.) Duhl Long-Haul, Inc., is considering the purchase
of a tractor-trailer that would cost $126,175, would have a useful life of 5 years, and would
have no salvage value. The tractor-tr

Chapter 13 - Capital Budgeting
56. (Ignore income taxes in this problem.) The management of Dewitz Corporation is
considering a project that would require an initial investment of $65,000. No other cash
outflows would be required. The present value of the

Chapter 13 - Capital Budgeting
62. (Ignore income taxes in this problem.) The Jackson Company has invested in a machine
that cost $70,000, that has a useful life of seven years, and that has no salvage value at the end
of its useful life. The machine is b

Chapter 13 - Capital Budgeting
88. The net present value of this investment would be:
A. $(14,350)
B. $107,250
C. $77,200
D. $200,000
(Ignore income taxes in this problem.) Houis Inc. is considering the acquisition of a new
machine that costs $300,000 and

Chapter 13 - Capital Budgeting
14. The simple rate of return method places its focus on cash flows instead of on accounting
net operating income.
True False
Multiple Choice Questions
15. If a company has computed the project profitability index of an inve

Chapter 13 - Capital Budgeting
32. (Ignore income taxes in this problem.) A piece of new equipment will cost $70,000. The
equipment will provide a cost savings of $15,000 per year for ten years, after which it will
have a $3,000 salvage value. If the requ

Chapter 13 - Capital Budgeting
Chapter 13
Capital Budgeting Decisions
True / False Questions
1. If the internal rate of return exceeds the required rate of return for a project, then the net
present value of that project is positive.
True False
2. In comp

Chapter 13 - Capital Budgeting
116. The simple rate of return, to the nearest tenth of a percent, of this investment is:
A. 18.2%
B. 16.1%
C. 31.3%
D. 27.7%
(Ignore income taxes in this problem.) Friden Company has just purchased a new piece of
equipment

Chapter 13 - Capital Budgeting
138. (Ignore income taxes in this problem.) Ahlman Corporation is considering the following
three investment projects:
Required:
Rank the investment projects using the project profitability index. Show your work
139. (Ignore

Chapter 13 - Capital Budgeting
32. (Ignore income taxes in this problem.) A piece of new equipment will cost $70,000. The
equipment will provide a cost savings of $15,000 per year for ten years, after which it will
have a $3,000 salvage value. If the requ

PROJECT ASSIGNMENT
MANAGEMENT ACCOUNTING -I
Sec. A&B
- Dr. Sandeep Goel
As an integral component for practical learning and evaluation the students are being
assigned a project. This is a group activity and it is expected that each member of the
group wou

Introduction
Capital markets are markets for buying and selling equity
and debt instruments.
Capital markets channel savings and investment between
suppliers of capital such as retail investors and institutional
investors, and users of capital like busi

Managerial Accounting
Power Sector Company : Operating Efficiencies
History of the Power Sector in
India
The industry has mainly developed through State
controlled instruments.
Until 1975 dev. mainly through SEBs/electricity
departments controlled by th

CAPITAL MARKETS
AISWARJYA MAHAPATRA
BIKASH SAGAR PADHY
HUZEFA JUZER LOKHANDWALA
MOHIT SHARMA
RIA ROCHLANI
VIBHOR DHOTE
15P183
15P193
15P203
15P213
15P223
15P238
Definition
Capital Market is a part of the financial market (along with
money markets) which

, "many times during the past few
iII memes town. Decker and his partners had found themselves haw
than ever before. To attract repair jobs and avoid layoffs, Decker an.
.1 lam. 'ees for minor repairs for the rst time in 10 years. Decker looked
at perati