Question

question 2 when considering the net cash inflows resulting from a capital budgeting decision taxes will:

1-increase the amount of the cash saving by tax rate

2-reduce the amount of the cash savings by (1-tax rate)

3-increase the amount of the cash savings by (1-tax rate)

4- reduce the amount of the cash saving by the (1+tax rate)

5- increase the amount of the cash savings by (1+tax rate)

question 3

opportunity cost is a cost of capital for which of the following sources of funds ?

1-long term debt

2-preferred shares

3-short term debt sold at a discount

4-common shares

5-internally generated cash flow

question 5

comparison of the actual results for a project to the costs and benefits expected at the time the project was selected is referred to as :

1-a cost benefit analysis

2-management control

3-the audit trail

4-capital budgeting

5-a post investment audit

question 6

the net present value method is better than the internal rate of return because

1-it considers the source of cash flows

2-the NPV of different projects can be added together and investment may have multiple required rates of return

3-managers generally find the npv method easier to understand

4-IRR focuses more on accounting income

5-it always yields the same result as IRR

question 8

the time value of money

1-is the opportunity cost of not having the money today

2-is equal to the bank prime rate

3-includes the rate of inflation

4-is the same value for all companies

5-is equal to the rate of inflation

Answer 1

Answer with explanation is given below