Flashcards
Chapter 9 Cue Cards
Flashcards do conjunto (10)
- 1What is an incremental cash flow?Cash flow with project - cash flow without project
- 2What is the difference between a firms short term assets and liabilities?Net working capital
- 3What is a cash inflowWhen inventories are sold and accounts receivable are collected (and its positive)
- 4Total 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 - 5What is a word for Capital Cost Allowance (CCA)Depreciation
- 6Tax savings from Depreciation is called the:CCA Tax Shield
- 7Straight line depreciation is used for intangible assets T/FTrue
- 8Most assets use a declining balance method for Depreciation T/FTrue
- 9What do we do differently with NPV when there are Tax ShieldsCalculate PV of operating cash flow separately from PV of CCA Tax shields
- 10CCA Tax shields only last as long as the asset T/FFalse.
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