Question 11 (1 point)

The difference between the yield on local government bonds and the yield on corresponding domestic government treasury bonds is known as

Question 11 options

1- sovereign spread.

2-interest rate risk.

3-interest expense.

4-the foreign discount rate.

5-the risk free rate.

Question 8 (1 point)

The three factors that generally influence depreciation under IFRS/ASPE are: amount allowable for depreciation, allowable life of asset, and allowable methods of depreciation. In Canada, for tax purposes

Question 8 options:

1-

the amount allowable for CCA is the cost of the asset, and, the allowable life of asset and the amount of salvage value are determined by its Class under the Income Tax Act.

2-

in the year of acquisition of new assets into an existing pool the allowable CCA claim is based on 50% of all the assets in the pool.

3-

depreciable assets are placed in various classes by the Income Tax Act, based on their estimated salvage value.

4-

the allowable depreciation for tax purposes (CCA) is increased for the first year only.

5-

the amount allowable for CCA is the cost of the asset; the tax-based depreciation rate is determined by the Class of the asset under the Income Tax Act, and neither the estimated life of asset nor the amount of estimated salvage value are relevant in calculating the CCA claim.

Question 7 (1 point)

An accounting measure of income divided by an accounting measure of investment is called

Question 7 options:

1-

bailout payback.

2-

rate of return on assets method.

3-

book-value method.

4-

net previous value.

5-

accrual accounting rate of return.

Question 5 (1 point)

Which of the following statements is TRUE?

Question 5 options:

1-

Since CCA does not involve a cash expenditure, it can be ignored in capital-budgeting decisions.

2-

The total CCA available over the life of the asset depends on the method of depreciation used.

3-

The accounting book value for all assets in a class equals the UCC for that class.

4-

The CCA claimed does not affect cash outflows.

5-

The depreciation method used does not affect cash inflows from operations.

Question 2 (1 point)

Which of the following is NOT a part of the capital budgeting decision process model?

Question 2 options:

1-	Forecast all potential cash flows attributable to the alternative projects.
2-	Identify potential capital investments that agree with the organization's strategy.
3-	Track realized cash flows, compare against estimated numbers, and revise plans if necessary.
4-	Manage the control of non-quantitative factors.
5-	Determine which investment yields the greatest benefit and the least cost to the organization.