If the company sells the asset for more than its tax basis but less than its original cost: the difference between the sales price and the tax basis is a gain, taxable at ordinary tax rates. Select one: a. True b. False

Question 2 Question text If a company sells an asset for less than its tax basis: the result is a capital loss. in this case, the assets value has increased by more than the amount taken for depreciation for tax purposes. a capital loss is given special tax treatment. Select one: a. True b. False

C Question 3 question Question text Post audits are conducted to see if the funs assigned into the original capital proposal turned out to be accurate. Select one: a. True b. False

Question 4 Question text The CAPM is one method of computing a risk-adjusted discount rate to reflect the risk of a project. Select one: a. True b. False

Question 5Not yet answeredMarked out of 1.00Not flaggedFlag question Question text The advantage of IRR method of evaluating the project is that it tells what the project under concern will return in terms of percentage. Select one: a. True b. False

Question 6Not yet answeredMarked out of 1.00Not flaggedFlag question Question text NPV = Future Cash flows discounted at the cost of capital less the Cost of the Project. If NPV > 1, accept the project. If NPV < 1, reject the project. Select one: a. True b. False Clear my choice

Question 7Not yet answeredMarked out of 1.00Not flaggedFlag question Question text Capital rationing refers to the situation whereby a limit is placed on the quantity of funds to invest in capital budgeting. Select one: a. True b. False Clear my choice

Question 8Not yet answeredMarked out of 1.00Not flaggedFlag question Question text Economic Value Added (EVA) is important in capital budgeting because it is used as an indicator of how liquid a company is, and it therefore serves as a reflection of management performance. Select one: a. True b. False Clear my choice

Question 9Not yet answeredMarked out of 1.00Not flaggedFlag question Question text Monte Carlo simulation lets you see all the possible outcomes of your project and assess the impact of risk, allowing for better decision making under uncertainty. Select one: a. True b. False Clear my choice

Question 10 question Question text Sensitivity analysis may not indicate range of NPVs, but it does indicate the probability of occurrence. Select one: a. True b. False

Question 11 Question Question text If the Protability Index is greater than zero, the capital investment is accepted. Select one: a. True b.

Question 12Not yet answeredMarked out of 1.00Not flaggedFlag question Question text A projects profitability index measures the return of a project relative to cost. If PI > 0 = Accept the project. If PI < 0 = Reject the project. Select one: a. True b. False

13Not yet answeredMarked out of 1.00Not flaggedFlag question Question text Decision regarding replacement of an existing asset with another is based on the net future value and internal rate of return of the incremental cash flows Select one: a. True b. False

Question 14Not yet answeredMarked out of 1.00Not flaggedFlag question Question text In business, an assessed loss arises when tax-deductible expenses exceed net income for tax purposes Select one: a. True b. False Clear my choice

Question 15Not yet answeredMarked out of 1.00Not flaggedFlag question Question text Sensitivity Analysis is a method that measures how the impact of uncertainties of one or more output variables can lead to uncertainties of other output variables in a project. Select one: a. True b. False Clear my choice