n Honda develops a new engine the incidental effects might include the following
ID: 2779885 • Letter: N
Question
n Honda develops a new engine the incidental effects might include the following: (0.5 pts) 1) demand for replacement parts 11) profits from the sale of repair services; l) offer modified or improved versions of the new engine for other uses A. l only I and II only I and Ill only I, I1, and II C. D. Answer 3. For the case of an electric car project, the following costs should be treated as incremental costs when deciding whether to go ahead with the project EXCEPT: (0.5 pts) A. B. C. D. the consequent reduction in sales of the company's existing gasoline models (Le., incidental effects) interest payments on debt incurred to finance the project the value of tools that will be transferred to the project from the company's existing plants instead of being sold. the expenditure on new plants and equipment Answer analyzing whether to invest in 4. For the case of an electric car project, which of the following costs or cash flows should be categoried as incremental when the project? (0.5 pts) A. B. The cost of research and development undertaken for developing the electric car during the past three years The annual depreciation charge Tax savings resulting from the depreciation charges Dividend payments D.Explanation / Answer
2.
I,II, and III
so above D is the answer
3.
B interest payments in debt incurred to finance the project
as this is not an incremental cost as these should be part of core costs.
the above is the answer
4.
tax savings resulting from the depreciation charges
because this would result in tax reduction which is a cash inflow
the above is the answer
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