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1. The building of the ________ cash flow of a project is the cornerstone of the

ID: 2707725 • Letter: 1

Question

1. The building of the ________ cash flow of a project is the cornerstone of the financial decision models.

2. Fully depreciated assets ________ , and so any proceeds from sale at disposal are taxable gains.

3. Consider the following four-year project. The initial after-tax outlay is $550,000. The future after-tax cash inflows for years 1, 2, 3 and 4 are: $175,000, $250,000, $280,000 and $200,000, respectively. What is the payback period without discounting cash flows? 1. The building of the ________ cash flow of a project is the cornerstone of the financial decision models.

2. Fully depreciated assets ________ , and so any proceeds from sale at disposal are taxable gains.

3. Consider the following four-year project. The initial after-tax outlay is $550,000. The future after-tax cash inflows for years 1, 2, 3 and 4 are: $175,000, $250,000, $280,000 and $200,000, respectively. What is the payback period without discounting cash flows? 1. The building of the ________ cash flow of a project is the cornerstone of the financial decision models.

2. Fully depreciated assets ________ , and so any proceeds from sale at disposal are taxable gains.

3. Consider the following four-year project. The initial after-tax outlay is $550,000. The future after-tax cash inflows for years 1, 2, 3 and 4 are: $175,000, $250,000, $280,000 and $200,000, respectively. What is the payback period without discounting cash flows?

Explanation / Answer

1. The building of the _Incremental_______ cash flow of a project is the cornerstone of the financial decision models.


2. Fully depreciated assets _have a book value of zero

_______ , and so any proceeds from sale at disposal are taxable gains.