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Author Question: Depreciation is considered to be an outflow of cash. Indicate whether the statement is true or ... (Read 122 times)

oliviahorn72

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on: Jul 10, 2018
Depreciation is considered to be an outflow of cash.
 
  Indicate whether the statement is true or false

Question 2

Consider the following projects, X and Y, where the firm can only choose one. Project X costs 600 and has cash flows of 400 in each of the next 2 years.
 
  Project Y also costs 600, and generates cash flows of 500 and 275 for the next 2 years, respectively. Which investment should the firm choose if the cost of capital is 10 percent?
  A) Project X, since it has a higher NPV than Project Y
  B) Project Y, since it has a higher NPV than Project X
  C) Project X, since it has a lower NPV than Project Y
  D) Project Y, since it has a lower NPV than Project X


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ms_sulzle

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Reply #1 on: Jul 10, 2018
Answer to Question 1

FALSE

Answer to Question 2

A


oliviahorn72

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Reply 2 on: Jul 10, 2018
Great answer, keep it coming :)

steff9894

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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