Question
1.) the payback period has a few weaknesses and one of the weaknesses is that it disregards: A.) Cashflows during payback periods B.) Projects with
1.) the payback period has a few weaknesses and one of the weaknesses is that it disregards:
A.) Cashflows during payback periods
B.) Projects with shorter payback periods
C.) The time value of money
D.) Start up costs
E.) NINV
F.) Networking capital at time zero
2.) in Capital budgeting decisions, companies are trying to decide whether the firm should take own some new project. Therefore, it is important that the weighted average cost of capital used in capital budgeting analysis be based on historical costs
True/False
3.) When the net working capital for a project is recaptured, what is an associated tax consequence?
A.) The firm must pay sales tax
B.) The firm must pay tax and a penalty
C.) The firm must pay capital gains tax
D.) There is no tax consequence
E.) The firm must pay ordinary income tax
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