Lomumu-IALAM IIDII-l IUD-'0 . What is the difference between capital budgeting decisions covered in this chapter and management decisions covered in Chapter 4 \"How Are Relevant Revenues and Costs Used to Make Decisions?"? . What concept must be considered when looking at cash ows over several years for a long-term investment? Explain. . What is meant by the term present value? . What is the formula used to calculate the present value of a future cash ow? Describe each component. . Describe the three steps required to evaluate investments using the net present value method. . How do most rms establish the required rate of return used to calculate the net present value? . What is meant by the term intemai rate of return? Explain the IRR decision rule? . For the purpose of calculating net present value and internal rate of return, do companies use the accrual basis of accounting? Explain. . Why might a ti rm choose to accept a long-term investment even if the net present value is below zero? . What might cause a manager to reject a long-term investment even though the net present value is positive? . Describe the two steps required to calculate net present value and internal rate of return when using Excel. . What does the term working capital refer to, and how does working capital affect the evaluation of long-term investments