Chapter 11 Question 7 The impact of a project on another project\'s cash flows s

Question

Chapter 11 Question 7 The impact of a project on another project's cash flows should be ignored. a) False b) True Question 8 Since our perspective when evaluating a project is that of all of the investors in the firm, creditors as well as stockholders, then we should evaluate the pretax cash flows produced by a project. a) True b) False Question 9 BioGeological Pharmaceuticals invested $100 million on a heart drug that does not prevent heart disease. BioGeological has since found that the drug does prevent diabetes. When considering whether to market the drug as a diabetic panacea, the firm should consider the $100 million spent while investigating the heart-related effects. a) False b) True Question 10 The MACRS depreciation tax schedule for three-year equipment provides a depreciation rate for a total of four years. a) True b) False

Explanation / Answer

7 a 8 a 9 b 10 a

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