week 4 - reading materials Flashcards
1
Q
which are the 2 main factors that the investment appraisal process must consider?
A
Taxation and inflation
2
Q
which cash flows must be considered in capital budgeting?
A
relevant and incremental
3
Q
should sunk cost be included in capital budgeting?
A
NO, since they will be paid whether or not the project is undertaken
4
Q
should we consider additional investments in working capital as a incrmental and relevant cost?
A
yes
5
Q
should we include the interest payments as a relevant cash flow?
A
no, because it is already included in the cost of capital
6
Q
A
