Chapter 9 Cue Cards

Question	Answer
What is an incremental cash flow?	Cash flow with project - cash flow without project
What is the difference between a firms short term assets and liabilities?	Net working capital
What is a cash inflow	When inventories are sold and accounts receivable are collected (and its positive)
Total Cash flow consists of 3 components:	1. Cash flow from investments in plant/equipment (Capital) 2. Cash from investment in working capital 3. Cash flow from operations
What is a word for Capital Cost Allowance (CCA)	Depreciation
Tax savings from Depreciation is called the:	CCA Tax Shield
Straight line depreciation is used for intangible assets T/F	True
Most assets use a declining balance method for Depreciation T/F	True
What do we do differently with NPV when there are Tax Shields	Calculate PV of operating cash flow separately from PV of CCA Tax shields
CCA Tax shields only last as long as the asset T/F	False. Infinite Life

Resource summary

	Created by dylan_earl over 11 years ago