True or false: The replacement decision of an existing asset cannot be taken using the discounted cash flow analysis. True false question. True False
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True or false: The replacement decision of an existing asset cannot be taken using the discounted cash flow analysis.
True false question.
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- When a depreciable asset is sold, with no proceeds (i.e., sold for zero), then it can be ignored for decision making because there is by definition no impact on cash flow. Group of answer choices True FalseIn the discounted cashflow method, the discount rate is used for the following reasons EXCEPTa. it removes the timing differences of cashflows.b. it serves as the required rate of return of the asset being valued.c. it removes the expected riskiness of differing assetsd. it equalizes cash inflows to cash outflows so that the value would equal to the market value.This can occur when a selection among mutually exclusive alternatives is based wrongly on maximization of IRR on the total cash flow. O a. Investment errors O b. Ranking errors Ос. Incremental errors Od. Alternative errors
- Loss on disposal of a non-current asset is a cash outflow. Select one: True FalseWhich of the following is NOT a limitation of the payback rule? O It does not consider cash flows occurring after the payback period. O Lacks a decision criterion that is economically based. O It does not consider the time value of money. O It is difficult to calculate.In current purchasing power technique (a) Why is it necessary to consider monetary assetsseparately from nonmonetary assets? Analyze withexamples. (b) Why does holding monetary assets lead to apurchasing power loss, but holding nonmonetary assetsdoes not lead to a purchasing power loss? Analyze withexamples
- Help plsWhere do nothing was preferred what assumption is being made about the return generated by the univested funds?Critically evaluate the pros and cons of the following statement: Financial statements are useless because they present assets at their historical costs rather than at their fair market values.
- Forecasting risk can be defined as the possibility that _____ will lead to incorrect decisions. a. the inclusion of opportunity costs b. erosion c. errors in projected cash flows d. the exclusion of sunk costs e. net working capital costsWhich of the following cases involve(s) discounted cash flow analysis? More than one answer may be correct. Multiple select question. Replacing an asset Evaluating equipment with different lives Setting the bid price Evaluating cost-cutting proposals Establishing an optimum inventory levelIgnoring differences in the useful lives of investments when evaluating capital expenditure alternatives A B с D cannot be addressed by adjusting cash flow assumptions of the proposals can distort present value analysis and adversely affect decisions will never distort present value analysis or adversely affect decisions reduces complexity and improves decision making
