A financial analyst included the interest cost of the debt used to buy new machinery in the cash flows from a capital budgeting project. Is…

What is the meaning of: a. Net present value? The net present value of a proposed investment project is the anticipated increase (if positive or…

True or false (and why?): The NPV technique uses the firm’s cost of capital in its calculation, but the IRR technique does not. Therefore, the…

Why is the net present value of a capital budgeting project equal to zero when its internal rate of return is used as the discount…

What is the danger of applying one cost of capital to all proposed capital budgeting projects? Not all capital budgeting projects are of the same…

The most common meaning for the term working capital is the difference between current assets and current liabilities: In this usage, working capital is the…

Even though each component of the current accounts (each dollar of cash, each account receivable, each item of inventory, each account payable, etc.) turns over…

In what ways is the cash flow table used to organize the data for permanent working capital asset decisions similar to and different from the…

What is a project’s “net annual benefit?” Why is this measure used in evaluating permanent working capital asset decisions? Net annual benefit is the amount…

Discuss how a corporate treasurer allocates the firm’s cash balance. What are the factors taken into account in making the allocation? Corporate treasurers allocate a…