Finance Essay

484 Words2 Pages
BADM310 – FALL 2013 NAME____Angela Henkemeyer_________________ CHAPTER 9 QUIZ Week of October 20, 2013 1. Projects that are calculated as having negative NPVs should be: A. depreciated over a longer time period. B. charged less in overhead costs. C. discounted using lower rates. D. rejected or abandoned. 2. The value of a proposed capital budgeting project depends on the: A. total cash flows produced. B. incremental cash flows produced. C. accounting profits produced. D. increase in total sales produced. 3. Assume your firm has an unused machine that originally cost $75,000, has a book value of $20,000, and is currently worth $25,000. Ignoring taxes, the correct opportunity cost for this machine in capital budgeting decisions is: A. $75,000 B. $25,000 C. $20,000 D. $5,000 4. What is the amount of the operating cash flow for a firm with $500,000 profit before tax, $100,000 depreciation expense, and a 35% marginal tax rate? A. $260,000 B. $325,000 C. $360,000 D. $425,000 5. What nominal annual return is required on an investment for an investor to experience a 12% gain in purchasing power? Assume inflation to be 4%. A. 7.69% B. 9.29% C. 12.00% D. 16.48% 6. A parcel of corporate land was recently dedicated as the new plant site. What cost allocation should the land receive, based on the following: original cost of $200,000, market value of $300,000, net book value of $200,000, a recent offer to purchase for $250,000. A. $200,000 B. $250,000 C. $275,000 D. $300,000 7. Assuming that an asset has been fully depreciated according to its MACRS class life, which of the following statements is correct concerning the value of the asset? A. Its market value is zero. B. Its book value is zero. C. Its book value is the current market value. D. It has neither book value nor market value 8. Working capital will

More about Finance Essay

Open Document