Which of the following statements is FALSE?
A: Many projects use a resource that the company already owns.
B: When evaluating a capital budgeting decision, we generally include interest expense.
C: Only include as incremental expenses in your capital budgeting analysis the additional overhead expenses that arise because of the decision to take on the project.
D: As a practical matter, to derive the forecasted cash flows of a project, financial managers often begin by forecasting earnings.
A: Many projects use a resource that the company already owns.
B: When evaluating a capital budgeting decision, we generally include interest expense.
C: Only include as incremental expenses in your capital budgeting analysis the additional overhead expenses that arise because of the decision to take on the project.
D: As a practical matter, to derive the forecasted cash flows of a project, financial managers often begin by forecasting earnings.
举一反三
- Which one of the following terms is defined as the management of a firm's long-term investments? A: working capital management B: financial allocation C: agency cost analysis D: capital budgeting
- Which of the following statements is FALSE? A: Depreciation is a method used for accounting and tax purposes to allocate the original purchase cost of the asset over its life. B: Sometimes the firm explicitly forecast free cash flow over a shorter horizon than the full horizon of the project or investment. C: Earnings include the cost of capital investments, but do not include non-cash charges, such as depreciation. D: Firms often report a different depreciation expense for accounting and for tax purposes.
- Which of the<br/>following statements is least accurate?( ) A: If a project is<br/>riskier than the firm’s normal project, the firm should adjust<br/>the project’s discount rate upward. B: In the absence of<br/>capital rationing, a firm should take all projects with a positive<br/>net present value. C: When capital is rationed, the projects with the highest IRRs should be selected.
- 中国大学MOOC: Which of the following cash flows are relevant incremental cash flows for a project that you are currently considering investing in?
- Which of the four “misleading prescriptions” can be seen as part of a process of decision making ? A: Corporations should invest in all opportunities where probable returns exceed the cost of capital B: Better quantification of future uncertainty and risk is the key to more effective resource allocation C: Planning and capital budgeting are two separate processes --- capital budgeting is a financial activity D: Top management’s role is to challenge the numbers rather than the underlying thinking.