Which of the following should be considered when a company estimates the cash flows used to analyze a proposed project?
A. The new project is expected to reduce sales of one of the company's existing products by 5%.
B. Since the firm's director of capital budgeting spent some of her time last year to evaluate the new project, a portion of her salary for that year should be charged to the project's initial cost.
C. The company has spent and expensed $1 million on research and development costs associated with the new project.
D. The company spent and expensed $10 million on a marketing study before its current analysis regarding whether to accept or reject the project.
E. The firm would borrow all the money used to finance the new project, and the interest on this debt would be $1.5 million per year.
Answer: A
You might also like to view...
The manager of employee and industrial relations helps to settle employee complaints and grievances
Indicate whether the statement is true or false
Which of the following bank reconciliation items would not require a journal entry?
a. a bank service charge; b. interest earned; c. NSF checks; d. deposits in transit; e. collections made by the bank on behalf of the depositor.
The International Court of Justice has justices that are elected by the U.N. General Assembly and the U.N. Security Council
Indicate whether the statement is true or false
Which of the following is NOT one of the primary distinctions between U.S. and foreign labor laws?
A) Many non-U.S. nations' laws require employee consultation or participation in management decisions that Americans view as being the owner's prerogative. B) Many non-U.S. countries place legal constraints on employee dismissal that are unfamiliar to the U.S. investor. C) When a U.S. investor acquires a foreign business, by operation of law, it may also be acquiring the foreign industry's labor arrangements. D) Many American laws require employee consultation or participation in management decisions that non-U.S. businesspeople view as being the owner's prerogative.