Question 9

Estimating cash flows is a critical component of capital budgeting and analysis where information is taken from different departments of the company to best estimate the cash flows

True

False

3 points

Question 10

Depreciation effect is not important in calculating capital projects since depreciation does not affect cash.

True

False

Preferred stock is also a method of obtaining capital. When calculating the cost of preferred stock the effect of tax deductibility also needs to be taken into account.

True

False

3 points

Question 2

The cost to maturity for a bond with an expected current market value of $980, coupon 4%, 20 years to maturity is 4.15%.

True

False