17. A good capital investment usually has a positive net present value or econom

Question

17. A good capital investment usually has a positive net present value or economic profit across time True of False 18. Accounting income is a sufficient measure of performance because it includes risk and the cost of the invested funds. True of False 19. Incremental Cash Flow is the difference between the cash inflows of the firm with and without the investment project. True or False 20. Which of the following should be included in a cash flow schedule? A) dividends and interest expense B) building improvement C) a leased building D) none of theses 21. When cash flows are even and do not vary from year to year, the internal rate of return method is as casy to use as the net present value method. True of False 22. When done properly, the total-cost and incremental-cost approaches to choosing between alternatives answers are the same True of False 23. A decrease in the expected salvage value at the end of a capital budgeting project will have no effect on the internal rate of return for that project. True of False 24. When using the payback method, any cash flows for a project that occur after the payback period are not considered in computing the payback period for that project.

Explanation / Answer

Question Sl. No Answer 17 TRUE 18 FALSE 19 TRUE 20 Dividend and interest expenses 21 TRUE 22 TRUE 23 FALSE 24 TRUE 25 Proceeds from sale of an asset that is replaced 26 None of these 27 is concerned with whether a project clears minimum requied rate of return hurdle 28 A 29 TRUE

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