b describe the basic principles of capital budgeting, including cash flow estimation; Flashcards Preview

L1 36 Capital Budgeting > b describe the basic principles of capital budgeting, including cash flow estimation; > Flashcards

Flashcards in b describe the basic principles of capital budgeting, including cash flow estimation; Deck (3)
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1
Q

Basic Principles of Capital Budgeting

A

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2
Q

Basic Principles of Cash Flow Estimation

A

^^Financing costs are not included in a cash flow calculation but are considered in the calculation of the discount rate

3
Q

^^When computing the CF’s for a capital project, which of the following is -least likely- to be included? (Tax effects, Financing Costs, Opportunity Costs)

A

Least Likely to be computed in for a CF of a capital project are FINANCING COSTS. ^^Financing costs are not included in a cash flow calculation but are considered in the calculation of the discount rate