Question: 2. When computing the net present value of a project, the net amount received from salvaging the fixed assets used in the project is: A.

2. When computing the net present value of a2. When computing the net present value of a2. When computing the net present value of a
2. When computing the net present value of a project, the net amount received from salvaging the fixed assets used in the project is: A. subtracted from the initial cash outlay. B. included in the final cash flow of the project. C. excluded from the analysis since it occurs only when the project ends. D. subtracted from the original cost of the assets.4. Decreasing which one of the following will increase the acceptability of a project? A. sunk costs B. salvage value C. depreciation tax shield D. inventory 5. Which of the following should NOT be included in a NPV calculation? . depreciation expense interest expense increase in accounts receivable . changes in xed costs comm 8. Which of the following is a project cash inow? Ignore tax effects A. Decrease in accounts receivable B. Decrease in accounts payable C. Increase in inventory 9. Three years ago, company LMN purchased a machine for a 3-year project. The machine is being depreciated straight-line to zero over a 5-year period. Today, the project ended, and the machine was sold. Which one of the following correctly denes the aftertax salvage value of that machine? (T represents the relevant tax rate) A. Sale price + (Sale price-book value} x T B. Sale price + (Sale price book value) x (l-T) C. Sale price + (book value-sale price) x T

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