Depreciation is incorporated in cash flows because it:

Related MCQs

• Which of the following recognizes risk in capital budgeting analysis by adjusting estimated cash flows and employs risk free rate to discount the adjusted cash flows?
• The estimated benefits from a project are expressed as cash flows instead of income flows because:
• The ratio which is obtained by dividing the present value of future cash inflows by the present value of cash out flows is called
• The net cash flows of the project and their present values are as follows Year 1 2 3 4 Net cash flow (Rs) 5100 5100 5100 7100 PVIF @12% 0.893 0.797 0.712 0.636 Present Value (Rs) 4554 4065 3631 4516 The initial investment in the project is Rs12500, What is the NPV of the project?
• The discount rate which equates the present value of cash inflows with the present value of cash out flows is called -------
• Evaluation of Capital Budgeting Proposals is based on Cash Flows because:
• Intrinsic value of a bond is ______________ vlaue of the all future cash flows
• Which of the following does not effect cash flows proposal?
• Risk in Capital budgeting implies that the decision-maker knows___________of the cash flows.
• In Certainty-equivalent approach, adjusted cash flows are discounted at: