BUSI 1011 Lecture Notes - Lecture 5: Sensitivity Analysis, Tax Shield, Capital Budgeting
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Which of the following groups of capital budgeting techniques uses the time value of money? a. Book rate of return, payback, and profitability index. b. irr, payback, and npv. c. irr, npv, and profitability index. d. irr, book rate of return, and profitability index. In choosing from among mutually exclusive investments the manager should normally select the one with the highest a. npv. b. irr. c. profitability index. d. book rate of return. a 8. In deciding whether to replace a machine, which of the following is not a sunk cost? a. The expected resale price of the existing machine. b. The book value of the existing machine. c. the original cost of the existing machine. d. the depreciated cost of the existing machine. a 9. A company is considering replacing a machine with one that will save. ,000 per year in cash operating costs and have ,000 more depreciation expense per year than the existing machine.
