ACG 3351 ACG3351 Week 12 Quiz (Everest)

ACG 3351 Week 12 Quiz (Everest)

1. Capital budgeting focuses on projects over their entire lives in order to consider all the cash flows or cash savings from investing in a single project. (Points : 5)

2. The identification stage of capital budgeting explores alternative capital investments that will achieve the objectives of the organization. (Points : 5)

3. Internal rate of return is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time. (Points : 5)

4. The selection stage of the capital budgeting process consists of choosing projects for possible implementation. (Points : 5)

5. Discounted cash flow methods measure all the expected future cash inflows and outflows of a project as if they occurred at equal intervals over the life of the project. (Points : 5)

6. Discounted cash flow methods focus on operating income. (Points : 5)

7. Deducting depreciation from operating cash flows would result in counting the initial investment twice in the discounted cash flow analysis. (Points : 5)

8. The payback method is only useful when the expected cash flows in the later years of the project are highly uncertain. (Points : 5)

9. Relevant cash flows are expected future cash flows that differ among the alternative uses of investment funds. (Points : 5)

10. A manager who uses discounted cash flow methods to make capital budgeting decisions does not face goal-congruence issues if the accrual accounting rate of return is used for performance evaluation. (Points : 5)