operating cash flows of a project: includes tax. none of the others is correct are equal to the project's total projected net income. decrease when net working capital increases. are unaffected by the depreciation method selected.
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A: Kindly find the answers to you question below :
The operating cash flows of a project:
includes tax.
none of the others is correct
are equal to the project's total projected net income.
decrease when net working capital increases.
are unaffected by the
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- Which of the following cash flows are not considered in the calculation of the annual cash-flow for a capital investment proposal? Incremental costs. O Taxes. O Depreciation on the project. Proceeds from selling an old asset which is being replaced by a new asset. Change in revenue.To get a project's after-tax cash flow, you must subtract depreciation as though it is an expense from the taxable income and then add it back again as though it is a positive cash flow to get the final net cash flow.a. Trueb. FalseIs after-tax cashflow still the cash inflow even if it is the sum of NOPAT and depreciation in the project?
- Depreciation is a noncash expense: why is it considered when estimating a project net cash flows?which of the following should not be included in the cash flows for project analysis? Opportunity costs side effects or erosion sunk costs operating cash flows for all years The initial investment in net working capitalWhich of the following is NOTa relevant cash flow and thus should not be reflected in the analysis of a capital budgeting project? a. Shipping and installation costs. b. Cannibalization effects. c. Opportunity costs. d. Sunk costs that have been expensed for tax purposes. e. Changes in net working capital. Please explain your answer for better understanding.
- 6. Which of the following is NOT a relevant cash flow and thus should NOT be reflected in the analysis of a capital budgeting project? a. Changes in net operating working capital. b. Shipping and installation costs for machinery acquired. c. Cannibalization effects. d. Opportunity costs. e. Sunk costs that have been expensed for tax purposes.The present value of the expected net cash inflows for a project will most likely exceed the present value of the expected net profit after tax for the same project because Group of answer choices Cash flow reflects any change in net working capital, but sales do not. Income is reduced by dividends paid, but cash flow is not. Income is reduced by depreciation charges, but cash flow is not. Income is reduced by taxes paid, but cash flow is not. There is a greater probability of realizing the projected cash flow than the forecasted income.5. (Ignore income taxes in this problem.) Dowlen, Inc., is considering the purchase of a machine that would cost $150,000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $23,000. The machine would reduce labor and other costs by $36,000 per year. Additional working capital of $6,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 12% on all investment projects. The net present value of the proposed project is closest to: A) $13,223 B) $9,657 ⒸC) $6,699 D) -$2,004
- Why are interest charges not deducted when a projects cash flows are calculated for use in a capital budgeting analysis?(b) Although depreciation is not a cash flow item, it plays an important role in thecalculation of cash flow. Describe the impact of depreciation on a project’s cash flow.The AW of a project can be estimated by reducing all cash flows including the capital investment, salvage value in terms of annualized cash flows at an interest rate( i). Select one: True False
