Acc 560 Wk 9 Quiz 12 - All Possible Questions

ACC 560 WK 9 Quiz 12 - All Possible Questions

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ACC 560 WK 9 Quiz 12 - All Possible Questions

TRUE-FALSE STATEMENTS

    1.     Capital budgeting decisions usually involve large investments and often have a significant impact on a company's future profitability.

    2.     The capital budgeting committee ultimately approves the capital expenditure budget for the year.

    3.     For purposes of capital budgeting, estimated cash inflows and outflows are preferred for inputs into the capital budgeting decision tools.

    4.     The cash payback technique is a quick way to calculate a project's net present value.

    5.     The cash payback period is computed by dividing the cost of the capital investment by the  net annual cash inflow.

    6.     The cash payback method is frequently used as a screening tool but it does not take into consideration the profitability of a project.

    7.     The cost of capital is a weighted average of the rates paid on borrowed funds, as well as on funds provided by investors in the company's stock.

8. Using the net present value method, a net present value of zero indicates that the project would not be acceptable.

    9.     The net present value method can only be used in capital budgeting if the expected cash flows from a project are an equal amount each year.

  10.     By ignoring intangible benefits, capital budgeting techniques might incorrectly eliminate projects that could be financially beneficial to the company.

  11.     To avoid accepting projects that actually should be rejected, a company should ignore intangible benefits in calculating net present value.

  12.     One way of incorporating intangible benefits into the capital budgeting decision is to project conservative estimates of the value of the intangible benefits and include them in the NPV...