often involve large sums of money

often involve small sums of money

Chapter 14 | Quiz

Question 1

Question

''Capital budgeting'' decisions, which involve the acquisition of (choose 3)

Answer

land
food
cars
air
buildings
equipment

Question 2

Question

Capital budgeting decisions, which involve the acquisition of land, buildings, and equipment, are among the most important decisions made by healthcare managers.

Answer

True
False

Question 3

Question

Capital budgeting

Answer

often involve large sums of money
often involve small sums of money

Question 4

Question

Second, they typically are costly to

Answer

reverse and extend over long periods of time.
reverse and intend over long periods of time.

Question 5

Question

Finally, they define the ____ direction of the business.

Answer

Finally, they define the strategic direction of the business.
Finally, they define the dull direction of the business.

Question 6

Question

proposed capital budgeting projects are ____ according to purpose and size

Answer

roposed capital budgeting projects are classified according to purpose and size
roposed capital budgeting projects are unclassified according to purpose and size

Question 7

Question

proposed capital budgeting projects are classified according to ___ and ___

Answer

purpose and assets
purpose and size

Question 8

Question

for example (choose 2)

Answer

expansion of existing services
expansion into no services
expansion into new services

Question 9

Question

investor-owned businesses, projects that are expected to ______ to shareholder wealth

Answer

not contribute
contribute

Question 10

Question

not-for-profit businesses, identifies a project’s expected ____ on the business’s financial condition

Answer

effect
stigma

Question 11

Question

financial analysis: estimate the cash flows initial cash outlay (cost) Operating flows Terminal (ending) flow

Answer

estimate the cash non flow
estimate the cash flow

Question 12

Question

initial cash outlay (___) Operating flows Terminal (ending) flow

Answer

oraganization
cash

Question 13

Question

Initial cash outlay (cost) Operating flows Terminal (___) flow

Answer

continous
ending

Question 14

Question

financial analysis assess the project's

Answer

cost
riskiness

Question 15

Question

Estimate the project cost of capital (opportunity cost of capital or discount rate)

Answer

True
False

Question 16

Question

Estimate the project cost of capital (____ ____ of capital or discount rate)

Answer

discount cost
opportunity cost

Question 17

Question

Estimate the project cost of capital (opportunity cost of capital or ___ ___)

Answer

discount rate
expenses rate

Question 18

Question

financial analysis measures the ___ ___

Answer

financial effort
financial impact

Question 19

Question

Key Concepts in Cash Flow Estimation Focus on cash flow as opposed to accounting income

Answer

True
False

Question 20

Question

Key Concepts in Cash Flow Estimation Focus on __ __ as opposed to accounting income

Answer

old flow
cash flow

Question 21

Question

Cash flow timing -Usually cash flows occur daily -Often approximated by annual flows

Answer

True
False

Question 22

Question

Cash flow timing -Usually cash flows occur ______ -Often approximated by annual flows

Answer

every 1 year
daily

Question 23

Question

Cash flow timing -Usually cash flows occur daily -Often approximated by ___ flows

Answer

Cash flow timing -Usually cash flows occur daily -Often approximated by annual flows
Cash flow timing -Usually cash flows occur daily -Often approximated by semi-annual flows

Question 24

Question

Project life -Often unknown -Often truncated if long (terminal value)

Answer

True
False

Question 25

Question

Project life -Often ____ -Often truncated if long (terminal value)

Answer

known
unknown

Question 26

Question

Key Concepts in Cash Flow Estimation -Do not include sunk costs -Do include opportunity costs: For capital For other resources

Answer

True
False

Question 27

Question

Key Concepts in Cash Flow Estimation - ____________________________ -Do include opportunity costs: For capital For other resources

Answer

does includes sunk costs
does not include sunk cost

Question 28

Question

Key Concepts in Cash Flow Estimation -Do not include sunk costs -Do include _________: For capital For other resources

Answer

opportunity costs
business costs

Question 29

Question

Inflation effects must be considered Any strategic value implications must be considered

Answer

True
False

Question 30

Question

what 2 things must be considered?

Answer

deflation effects
inflation effects
non strategic value
strategic value

Question 31

Question

investment at t = 0 ( _ _ _ ) s

Answer

Question 32

Question

Investment at t = 0 (000s)

Answer

True
False

Question 33

Question

note that these cash flows are estimates

Answer

estimates
not estimates

Question 34

Question

If this were a replacement rather than a new (expansion) project, would the analysis change? The relevant operating cash flows would be the same between the cash flows on the new and old project.

Answer

True
False

Question 35

Question

If this were a replacement rather than a new (expansion) project, would the analysis change? The relevant operating cash flows would be ___ ___ between the cash flows on the new and old project.

Answer

the same
very different

Question 36

Question

However, selling the old equipment would produce an immediate cash inflow, but the salvage value at the end of its original life is foregone

Answer

cash inflow
cash outflow

Question 37

Question

There are many different approaches to breakeven in project analysis: Time breakeven Input variable breakeven

Answer

True
False

Question 38

Question

There are many different approaches to breakeven in project analysis: Time breakeven ___ variable breakeven

Answer

input
output

Question 39

Question

There are many different approaches to breakeven in project analysis: ___ breakeven Input variable breakeven

Answer

quality
time

Question 40

Question

time breakeven, which is measured by payback (or payback period).

Answer

True
False

Question 41

Question

time breakeven, which is measured by ---------- (or --------- period).

Answer

outback
payback

Question 42

Question

Advantages of Payback: 1. Easy to calculate and understand. Provides an indication of a project’s risk and liquidity. Disadvantages of Payback: 1. Ignores time value. 2. Ignores all cash flows that occur after the payback period.

Answer

True
False

Question 43

Question

Advantages of Payback: 1. ____ to calculate and understand. Provides an indication of a project’s risk and ___ Disadvantages of Payback: 1. Ignores time value. 2. Ignores all cash flows that occur after the payback period.

Answer

hard, liquidity
easy, liquidity

Question 44

Question

Advantages of Payback: 1. Easy to calculate and understand. Provides an indication of a project’s risk and liquidity. Disadvantages of Payback: 1. Ignores ____ ___. 2. Ignores all cash flows that occur after the payback period.

Answer

time value
project risk

	Created by nkhsemail over 8 years ago

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