Question
No 12. The Shoe Box is considering adding a new line of winter footwear to its product line-up. Which of the following are relevant cash
No 12.
The Shoe Box is considering adding a new line of winter footwear to its product line-up. Which of the following are relevant cash flows for this project? 1. Extra warehouse rent to store the new manufacturer II. Cash sales from the new line of footwear II. Interest paid to bank due to the extra loan IV. Increased material costs
A land IV only B 1, ll and IV only C ll and Ill only D ll and IV only E II, Illand IV only
No 11.
Which of the following are cash outflows from net working capital? 1. Increase in accounts payable II. Increase in inventory III. Decrease in accounts receivable IV. Decrease in fixed assets
A I, ll and ill only B I and Ill only C ll only D Ill and IVonly E Ill only
No 1o.
A net present value of zero implies that an investment:
A. has no expected impact on shareholders. B has a profitability index that is less than 1.0. C does not pay back its initial cash outlay. D has cash inflows which have a zero present value. E has an initial cost of zero.
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