Unused capital budget funds are assumed to earn the same rate of return as the average IRR of accepted projects
Indicate whether the statement is true or false.
Answer: FALSE
Explanation: Unused capital budget funds are assumed to earn the same rate of return as the firm's "going rate." Or, excess funds may be returned to investors via dividends or lesser amounts of borrowing.
You might also like to view...
The ratio of sales to invested assets is termed the investment turnover component of the rate of return on investment
Indicate whether the statement is true or false
Which of the below is a USE of cash?
A) Credit Sales B) Retirement of debt (paying off loans and bonds) C) Bank loans D) Cash sales of equipment or other assets of the company
In mediation a neutral third party imposes a settlement on two other parties
a. True b. False Indicate whether the statement is true or false
Indicate whether each of the following statements is true or false.In analysis of a capital investment, a cost saving is treated as a cash inflow. ______The expected salvage value of an asset is a source of a cash outflow that should be considered in capital investment analyses. ______Many capital investments require an increase in the amount of a company's working capital. ______Incremental revenues are treated as cash outflows in capital investment analyses. ______An increase in working capital, which may occur near the beginning of a capital investment project, is treated as a cash outflow. ______
What will be an ideal response?