How capital expenditure(investment) analysis helps in making long term decision to determine acceptability of project?

Q: How can we prepare a project's cash flow statement?

A: Cash flow statement of a project means summarised view of all cash inflows and cash outflows of the…

Q: How can we determine the period necessary to recover both the capitalinvestment and the cost of…

A: The Payback period (PBP) determines how long it would take a company to recover the investment. PBP…

Q: Which of the following cash flows should not be considered when evaluating a project? Changes in…

A: Following cashflows should not be considered when evaluating a project-

Q: How to analyze capital budgeting decisions? Which measures are important and why?

A: Capital Budgeting process involve analyzing the cash in flow and outflow of a project, to determine…

Q: what is the importance of cash flow management when evaluating proposals for capital expenditure?

A: The cash flow management is related to management of inflows of cash and outflows of cash with…

Q: When considering a project’s Operating Cash Flows, where are Financing        Costs included?

A: Financing cost is the cost of the debt taken by the company which would be used for financing the…

Q: The importance of cash flow management when evaluating proposals for capital expenditure?

A: All investments in capital assets are expected to earn a return, which is evaluated by comparing the…

Q: Discuss what level of management would be involved in making capital investment decisions?

A: Ans. Capital Investment decisions means how the money or funds involved in business would be…

Q: What are the major reasons to request a capital project?

A: Expansion and Growth: Companies often undertake capital projects to facilitate expansion and growth…

Q: Distinguish between the company cost of capital and project cost of capital?

A: Answer: Differences between project cost of capital and company’s cost of capital: Project cost of…

Q: Describe the process of developing cash flows for a project?

A: The project cash flow is required for the computation of NPV which further helps in analyzing the…

Q: Discuss how sunk costs, opportunity costs, side effects, financing costs, and taxes should be…

A: Sunk costs are costs that have already been incurred and thus cannot be recovered. They should be…

Q: 1.  Of all the methods for evaluating the data (techniques of capital budgeting), which one do you…

A: The capital budgeting is the selection of the best projects and optimal projects based on the…

Q: The capital budgeting tools: Net Present Value, Payback Period, and Internal Rate of Return. Which…

A: There are different methods of capital budgeting method.

Q: What is the process of Developing Project Cash Flow Statements?

A: The cash flow statement for the Project is required to keep check the on cash incoming and cash…

Q: Illustrate the conceptual basis upon which the practice of financial project analysis is built?

A: Net present value It is a concept through which the financial project viability can be analyzed. The…

Q: Determine the period necessary to recover both the capital investment and the cost of funds required…

A: The payback period alludes to what extent it takes for a speculator to hit breakeven to recoup the…

Q: Evaluate the concep of working capital management ? give examples

A: Working capital management ensures that the company has sufficient funds for operating its…

Q: Should financing costs be included as an incremental cash flow in capital budgeting analysis?…

A: Financing ost will be reflective of all such cost which are incurred due to financing of a…

Q: How does using the capital investment tools help decide what proposal to recommend to the company?

A: Capital investments tool consist of Net present Value and discounted cash flows. These tools are…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.