Question

What should you consider when you conduct capital budgeting analysis? a when the cash flows are...

What should you consider when you conduct capital budgeting analysis?

a when the cash flows are made

b the riskiness of the project

c how much the initial investment is for the project

d all of the above

e a and b only

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

ANSWER DOWN BELOW. FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

Capital budgeting is the method of analyzing and selecting long term investments which are in line with the goal of companies wealth maximization.

The capital budgeting decisions are important, vital and significant business decisions because

1.substantial expenditure involved.  

2. long period for the project.  

3. irreversibility of decisions.

4. The complexity involved in decision making.

The key inputs to the valuation process:

1. The expected cash flow from the assets over its lifetime and It's initial investment.

2. The timing of the cash flow.

3. The required rate of return from the cashflows to satisfy the cost of capital & risk levels.

Answer: d. All of the above.

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
Select all the statements that correctly describe the process of capital budgeting: A. the analysis should...
Select all the statements that correctly describe the process of capital budgeting: A. the analysis should take into account the risk of the project B. future cash flows rather than future accounting profits should be analysed C. all sunk costs associated with the project should be included in the analysis D. decisions should be made based on the company's goal of wealth maximisation E. the analysis should take into account the time value of money
Consider the following statements about taxes and after-tax cash flows: I. Capital budgeting analyses should incorporate...
Consider the following statements about taxes and after-tax cash flows: I. Capital budgeting analyses should incorporate after-tax cash flows rather than before-tax cash flows. II. Added company revenues will result in lower taxes for a firm. III. Operating expenses may actually provide a tax benefit for an organization. Which of the above statements is (are) correct? Select one: a. I and II. b. I and III. c. I only. d. III only. e. II only.
When projects involve certain, or constant, cash flows, the capital budgeting analysis that can be conducted...
When projects involve certain, or constant, cash flows, the capital budgeting analysis that can be conducted is very simple and straightforward. Unfortunately, this type of project rarely exists. When a project’s cash flows, or the conditions that affect their magnitude or timing, vary from their expected values, then the analysis becomes more complicated. Projects that have the potential to exhibit greater or lesser levels of risk than the firm’s average, or normal, level means that adjustments should be made to...
Which of the following are steps in a capital investment financial analysis? A Estimate the project’s...
Which of the following are steps in a capital investment financial analysis? A Estimate the project’s cash flows. B Assess the project’s riskiness. C Estimate the project cost of capital (discount rate). D Measure the financial impact. E All of the above
Which of the following should a financial manager consider when analyzing a capital budgeting project? I....
Which of the following should a financial manager consider when analyzing a capital budgeting project? I. project start up costs II. timing of all projected cash flows III. dependability of future cash flows IV. dollar amount of each projected cash flow choices: I and IV only II, III, and IV only I, II, III, and IV I, II, and IV only I, II, and III only
Any incremental cash flow is relevant in a capital budgeting project analysis including incremental cash flows...
Any incremental cash flow is relevant in a capital budgeting project analysis including incremental cash flows associated with existing projects.
When analysts and investors determine the value of a firm's shares, they should consider the: size...
When analysts and investors determine the value of a firm's shares, they should consider the: size of the expected cash flows timing of the cash flows riskiness of the cash flows all of the above size and riskiness of the cash flows but not their timing size and timing of the cash flows but not their riskiness none of the above
A proposed capital budgeting project has initial cash outflows, followed by cash inflows, which are then...
A proposed capital budgeting project has initial cash outflows, followed by cash inflows, which are then followed by more cash outflows. We call these types of cash flows: Question 28 options: A) reflective cash flows. B) non-normal cash flows. C) None of these are correct. D) normal cash flows. E) mutually exclusive cash flows.
Statement I: Capital budgeting is a cost-benefit analysis, and the calculations for both investments and cash...
Statement I: Capital budgeting is a cost-benefit analysis, and the calculations for both investments and cash flows are the same. Statement II: Capital budgeting is a cost-benefit analysis. Therefore, companies should be considering projects carefully to increase short-term revenues. ----- An investor gives you the following three casino projects with information on their return and risk Hotels Return Risk (σ) A 17% 8% B 27% 17% C 56% 13% Given the available information, you can calculate the coefficient of variation...
Consider a project with free cash flows in one year of ​$142,000 or ​$180,000​, with each...
Consider a project with free cash flows in one year of ​$142,000 or ​$180,000​, with each outcome being equally likely. The initial investment required for the project is ​$90,700​, and the​ project's cost of capital is 17%.  The​ risk-free interest rate is 10%.                              a. What is the NPV of this​ project? b. Suppose that to raise the funds for the initial​ investment, the project is sold to investors as an​ all-equity firm. The equity holders will receive the cash flows...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT