More Capital Budgeting Flashcards
How do you calculate Profitability Index?
PV of annual after-tax cash inflows / project cost
OR
NPV / Project cost
What is NPV?
net of cash inflows and outflows, including the initial project cost
What does the Profitability index compute?
the expected return for each dollar invested.
What is the most desirable project using the Profitability Index?
The highest index.
What is another name for the profitability index?
The cost/benefit ratio ranking method
Which method should be used if capital rationing needs to be considered when comparing projects?
Profitability index nigga
A project’s NPV is normally affected by the…
Proceeds from the sale of the asset to be replaced
What is the zero- coupon method used ofr?
determining the FV of Interest rate swaps
Articles of incorporation includes
name and address of incorporators.
Purpose of corp.
Name of registered agent of the corp
What type of bond is most likely to maintain a constant market value?
Floating rate
What is in the balance of payments account
All international payments made by one nation to another including capital movements
How do you calc the marginal propensity to save?
Change in savings / change in income
