Income statement Statement of retained earnings Statement of cash flows
You are trying to pick the least-expensive machine for your company . You have two choices : machine A , which will cost $ 50,000 to purchase and which will have OCF of - $ 3,500 annually throughout the machine ’ s expected life of three years ; and machine B , which will cost $ 75,000 to purchase and which will have OCF of - $ 4,900 annually throughout that machine ’ s four-year life . Both machines will be worthless at the end of their life . If you intend to replace whichever type of machine you choose with the same thing when its life runs out , again and again out into the foreseeable future , and if your business has a cost of capital of 14 percent , which one should you choose ?
Machine A Machine B Neither machine A nor B Both machines A and B
When firms use multiple sources of capital , they need to calculate the appropriate discount rate for valuing their firm ’ s cash flows as __________.
a simple average of the capital components costs a weighted average of the capital components costs a sum of the capital components costs they apply to each asset as they are purchased with their respective forms of debt or equity
Which of these is used as a measure of the total amount of available cash flow from a project ?
Operating cash flow Investment in operating capital Free cash flow Sunk cash flow
Which of these does NOT perform vital functions to securities markets of all sorts by channeling funds from those with surplus funds to those with shortages of funds ?