Whether the project is based on the relevant cash flow or increamental cash flow. Introduction: The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Jeff Krause purchased 1,000 shares of a speculative stock in January for $1.89 per share. Six months later, he sold them for $9.95 per share. He uses an online broker that charges him $10.00 per trade. What was Jeff's annualized HPR on this investment? Jeff's annualized HPR on this investment is %. (Round to the nearest whole percent.)

Congratulations! Your portfolio returned 16.7% last year, 2.5% better than the market return of 14.2%. Your portfolio had a standard deviation of earnings equal to 18%, and the risk-free rate is equal to 4.4%. Calculate Sharpe's measure for your portfolio. If the market's Sharpe's measure is 0.29, did you do better or worse than the market from a risk/return perspective? The Sharpe's measure of your portfolio is (Round to two decimal places.)

On January 1, 2020, Simon Love's portfolio of 15 common stocks had a market value of $258,000. At the end of May 2020, Simon sold one of the stocks, which had a beginning-of-year value of $26,900, for $31,400. He did not reinvest those or any other funds in the portfolio during the year. He received total dividends from stocks in his portfolio of $11,900 during the year. On December 31, 2020, Simon's portfolio had a market value of $246,000. Find the HPR on Simon's portfolio during the year ended December 31, 2020. (Measure the amount of withdrawn funds at their beginning-of-year value.) Simon's portfolio HPR during the year ended December 31, 2020, is %. (Round to two decimal places.)

Answer 2

Question

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

Answer 6

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

Answer 7

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Answer 8

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

Answer 12

Ch. 10.1 - What are the relevant incremental cash flows for...Ch. 10.1 - What is the stand-alone principle?Ch. 10.2 - Prob. 10.2ACQ Ch. 10.2 - Prob. 10.2BCQ Ch. 10.2 - Explain why interest paid is not a relevant cash...Ch. 10.3 - What is the definition of project operating cash...Ch. 10.3 - For the shark attractant project, why did we add...Ch. 10.4 - Prob. 10.4ACQ Ch. 10.4 - How is depreciation calculated for fixed assets...Ch. 10.5 - Prob. 10.5ACQ

Concept explainers

Answer to Problem 10.1CTF

Explanation of Solution

Want to see more full solutions like this?

Chapter 10 Solutions