Question 11. Question: When evaluating capital budgeting decision models, the payback
period emphasizes: Student Answer: Liquidity. Profitability. Cost of capital. Average net income divided by average investment. Average after-tax cash inflow divided by average investment.
Question 12. Question: In a discounted cash flow( DCF) analysis, a required incremental
investment in net working capital: Student Answer: Should be amortized over the useful life of the equipment. Can be disregarded because the same amount of cash will be recovered at the end of the project ' s life. Should be treated as a recurring cash outflow over the life of the project.
different useful lives. UNIT 4 QUIZ
Question 11. Question: When evaluating capital budgeting decision models, the payback
period emphasizes: Student Answer: Liquidity. Profitability. Cost of capital. Average net income divided by average investment. Average after-tax cash inflow divided by average investment.
Question 12. Question: In a discounted cash flow( DCF) analysis, a required incremental
investment in net working capital: Student Answer: Should be amortized over the useful life of the equipment. Can be disregarded because the same amount of cash will be recovered at the end of the project ' s life. Should be treated as a recurring cash outflow over the life of the project.