Question

1. For a given time period in a project life, the incremental net cash flow equals...

1. For a given time period in a project life, the incremental net cash flow equals

a. changes in cash flows for the period relative to baseline projections for the project

b. incremental cash inflows in that period, less incremental cash outflows in that period

c. cash flows in the given period relative to cash flows in the preceeding period

2. Net cash flows from a project are residual. what does this term mean?

a. the term refers to the portion of net cash flows that are left over after cash dividends have been paid to shareholders

b. the net cash flows are cash left over after all other claimants have been paid per terms of their contracts with the form or under tac law


Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1. option B is Correct

the incremental net cash flow = Revenues - outflows- initial cost.

the incremental net cash flow is equal to incremental cash inflows in that period, less incremental cash outflows in that period

2.option B is correct

residual cash flow is calculated by taking net adjusted cash flows for the accounting period ,reported on cash flow statement and subtracting the cost of capital.

Net cash flows from a project are residual. refers to the net cash flows are cash left over after all other claimants have been paid per terms of their contracts with the form or under tac law

Thank You so much

please comment for any further help

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Please show in excel A new production line generates the following incremental cash flows over its...
Please show in excel A new production line generates the following incremental cash flows over its 5-year useful life. Year 1 2 3 4 5 Cash flow ($ million) 1.5 1.3 1.05 0.9 0.7 What is the present worth of these cash inflows given that the cost of capital for the project is 12%? Given that the forecasted inflation rate is 3% per year over the period estimate the real cash flows (expressed in terms of year 0 dollars) and...
1. The cash inflows and (outflows) associated with a project are as follows: Year Expected net...
1. The cash inflows and (outflows) associated with a project are as follows: Year Expected net cash flow ($) 0 120000 1 40000 2 50000 3 60000 The payback period for this project would be: a. 2 years b. 3 years c. 2 years and 6 months d. 2 years and 3 months
Income Flows Versus Cash Flows The text states, "Over sufficiently long time periods, net income equals...
Income Flows Versus Cash Flows The text states, "Over sufficiently long time periods, net income equals cash inflows minus cash outflows, other than cash flows with owners." Demonstrate the accuracy of this statement in the following scenario: Two friends contributed $50,000 each to form a new business. The owners used the amounts contributed to purchase a machine for $100,000 cash. They estimated that the useful life of the machine was five years and the salvage value was $20,000. They rented...
"Overly sufficiently long time periods, net income equals cash inflows minus cash outflows, other than cash...
"Overly sufficiently long time periods, net income equals cash inflows minus cash outflows, other than cash flows with owners". Demonstrate the accuracy of this statement in the following scenario: Two friends contributed 50,000 each to form a new business. The owners used the amounts contributed to purchase a machine for 100,000 cash. They estimated that the useful life of the machine was five years and the salvage value was 20,000. They rented out the machine to a customer for an...
1. Suppose you are considering investing $900,000 in a project. The annual net cash inflows over...
1. Suppose you are considering investing $900,000 in a project. The annual net cash inflows over the next five years are: $150,000; $200,000; $250,000; $400,000; $450,000. Calculate the payback period for the investment
1. When there is more than one sign change in the net cash flow, there may...
1. When there is more than one sign change in the net cash flow, there may be more than one real-number root to the ROR equation, resulting in multiple i* values. True or False 2. The IRR is the interest rate that makes the Present Worth "PW" of all the cash flows (inflows and outflows) equal to zero. True or False 3. Conventional cash flows are also known as non-simple cash flows. True or False 4. If the algebraic signs...
The NPV and payback period Suppose you are evaluating a project with the cash inflows shown...
The NPV and payback period Suppose you are evaluating a project with the cash inflows shown in the following table. Your boss has asked you to calculate the project’s net present value (NPV). You don’t know the project’s initial cost, but you do know the project’s regular, or conventional, payback period is 2.50 years. The project's annual cash flows are: Year Cash Flow Year 1 $400,000 Year 2 600,000 Year 3 500,000 Year 4 475,000 If the project’s desired rate...
1. Beta Enterprises, Inc. is considering a project that has the following cash flow and WACC...
1. Beta Enterprises, Inc. is considering a project that has the following cash flow and WACC data. What is the project's NPV? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box. WACC: 14% Year: 0 1 2 3 Cash flows: -$950 $500 $300 $400 2. Delta Enterprises, Inc. has a WACC of 10% and is considering...
1. Calculating project cash flows: Why do we use forecasted incremental after-tax free cash flows instead...
1. Calculating project cash flows: Why do we use forecasted incremental after-tax free cash flows instead of forecasted accounting earnings in estimating the NPV of a project? 2. The FCF calculation: How do we calculate incremental after-tax free cash flows from forecasted earnings of a project? What are the common adjustment items? 3. The FCF calculation: How do we adjust for depreciation when we calculate incremental after-tax free cash flow from EBITDA? What is the intuition for the adjustment? 4....
You can determine a company’s cash situation by analyzing its cash flow statement. The cash flow...
You can determine a company’s cash situation by analyzing its cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets. A firm has $20 million in revenues. Does that mean it has generated a cash flow of $20 million? Yes No The statement of cash flows reports...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT