Multiple Choice Questions (3 points each/Total 30 points) Circle the letter that

Question

Multiple Choice Questions (3 points each/Total 30 points) Circle the letter that is your answer. Note: there can be more than one co Cash Flow Statement includes which of the following elements (a) Net Income (b) Capital Investment (c) Borrowed Funds (d) Salvage value 1. 2 T here are 3 methods for describing project risks. Which of the following is/are not one of those methods? (a) Sensitivity Analysis (b) Profitability Assessment (c) Scenario Analysis (d) Break-even Analysis 3. When assessing if a project is financially justifiable, which of the following are not considerations: (a) MARR (b) Public relations (c) IRR (d) Cash flow

Explanation / Answer

(1) (a), (b) & (c)

Net income is used in Cash flow from operations section (using indirect method). Capital investment goes in Cash flow from investing (as a cash outflow) and Borrowed funds go under Cash flow from financing (as cash inflow).

(2) (d)

Break-even analysis shows the output and cost decisions for which there is a no-profit no--loss situation. It does not help assess risk.

(3) (b)

Public relation does not belong to financial decision making.

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