Question: Depreciation is a noncash expense; why is it considered when estimating a projects net cash flows?

Depreciation is a noncash expense; why is it considered when estimating a project’s net cash flows?

Step by Step Solution

★★★★★

3.41 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Although depreciation itself is a noncash charge it ha... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

138-B-C-F-C-B (688).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

Q:

A new project has expected annual net cash flows of $400,000 with a standard deviation of $250,000. The distribution of annual net cash flows is approximately normal. a. What is the probability of...

Q:

When relevant project cash flows are examined, why is an increase in tax depreciation at first deducted and then later added back in determining incremental net cash flow for a period?

Q:

Depreciation is a noncash expense but it is taxdeductible on the income statement Thus depreciation causes taxes paid an actual cash outflow to be reduced by an amount equal to the depreciation tax...

Q:

Depreciation is a noncash expense; why is it considered when estimating a projects net cash flows? P=857

Q:

1. Depreciation is a noncash expenses; why is it considered when estimating a projects net cash flow?

Q:

5. Why is depreciation, a noncash expense, considered when estimating a project's net cash flows? 6. What are the potential tax consequences of selling an old asset in an asset replacement investment...

Q:

What factors should be considered when estimating a new business NINV? Is it any different for an asset replacement project. . Why is depreciation, a noncash expense, considered when estimating a...

Q:

o dioud Hard copy to be submitted on Canvas (I do NOT need copies of the questions, only your answers). You must show your work for credit. Answers that aren't your own will receive a zero. Unless...

Q:

2. Depreciation is a noncash expense. Despite that fact, explain why it is necessary to consider depreciation when estimating a projects net cash flows.

Q:

In general, the use of accelerated depreciation instead of straight-line depreciation increases the value of a project to a firm because the use of a. accelerated depreciation techniques reduce tax...

Q:

#3) (17 Marks) Come and Go Inc. is a Canadian controlled private corporation. The following data summarizes the operations of Come and Go Inc. for the year ended December 31, 2017. Income (loss) from...

Q:

List the five fundamental standards of digital forensics (Module 1 Part 1 slides). Explain why each of these is important.

Q:

[ - / 2 Points ] SCALCET 9 1 . 5 . 0 4 5 . Express as a single logarithm. ( a ) l o g 1 0 ( 4 0 ) - 1 5 l o g 1 0 ( 1 0 0 , 0 0 0 ) ( b ) l n ( a ) - 6 l n ( b ) 4 l n ( c ) Need Help?

Q:

1. Suppose Mick's is projecting a 20% increase in sales for the coming year, and that cost of goods sold and general/administrative expenses remain a constant percentage of sales. Also assume that...

Q:

Discuss Utilitarianism and Kantian ethics. Give a brief explanation of the major proponents and the major elements of each. Now compare and contrast these two philosophies. Finally, explain the...

Q:

I. Write out two topic sentences and clearly explain the controlling idea of each. II. Develop one of the topic sentences into a unified complete and coherent paragraph by providing enough relevant...

Q:

Donna loves the Seahawks! She has a budget of $45 per month, which she can spend on Seahawks gadgetry at $5 a piece or on tickets to an autograph signing of Bobby Wagner, KJ Wright or Russell Wilson...

Q:

elected financial data for two intense competitors in a recent year follow (amounts in millions): Zeus Corporation Mars Company Statement of income data: Net sales $3,337 $6,857 Cost of goods sold...

Q:

How can we best justify a chosen stance, and its ensuing methodology, to ourselves and to others?

Q:

Set up the amortization schedule for a 5-year, $1 million, 9 percent term loan that requires equal annual end-of-year payments. Be sure to distinguish between the interest and the principal portion...

Q:

Set up the amortization schedule for a five-year, $1 million, 9 percent loan that requires equal annual end-of-year principal payments plus interest on the unamor- tized loan balance. What is the...

Q:

Set up the amortization schedule for a 5-year, $1 million, 9 percent bullet loan. How is the principal repaid in this type of loan? What is the effective interest cost of this loan? L01

Q:

1 (25 points) Use the Hermes dataset to answer these questions: For black (color category) bags, is the average hammer price higher for matte or shiny finishes? Hint: Use the Text to Columns feature...

Q:

Using the following data for First Bank: a) Calculate the banks static funding GAP over the various time buckets (0-6 months, 6 months - 1 year, and over 1 year). Consider both the periodic GAP and...

Q:

OE Question 24 1 pts 24. The bonds issued by General Motors was recently downgraded by both Moody's and Standard and Poor's to Junk bond status. As a result, the entire auto industry was adversely...