Which of statements best describes sunk costs

Assignment Help Financial Accounting
Reference no: EM132818164

Problem 1: Which of the following statements best describes the IRR method?

a. One defect of the IRR method is that it does not take account of cash flows over a project's full life.
b. One defect of the IRR method is that it does not take account of the time value of money.
c. One defect of the IRR method is that it does not take account of the cost of capital.
d. One defect of the IRR method is that it assumes that the cash flows to be received from a project can be reinvested at the IRR itself, and that assumption is often not valid.

Problem 2: Which of the following statements best describes sunk costs?

a. A sunk cost is any cost that must be expended in order to complete project and bring it into operation.
b. A sunk cost is any cost that was expended in the past but can be recovered if the firm decides not to go forward with the project.
c. A sunk cost is a cost that was incurred and expensed in the past and cannot be recovered if the firm decides not to go forward with the project.
d. Sunk costs were formerly hard to deal with, but once the NPV method came into wide use, it became possible to simply include sunk costs in the cash flows and then calculate the PV.

Reference no: EM132818164

Questions Cloud

How higher education institutions recruit and retain student : St. John, Daun-Barnett, and Moronski-Chapman describe several policies, major acts of legislation, and litigations that shaped higher education institutions.
Calculate the acquisition cost of the machine : Land in the books of MAP Ltd the land is recorded at its cost of $750 000. Calculate the acquisition cost of the Machine
Which of the statements best describes bond yields : A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements best describes bond yields?
Did the teacher use wait time effectively : Did the teacher use wait time effectively? How do you know? How good was the teacher at supporting transition in the class? What types of questions were asked?
Which of statements best describes sunk costs : Which of statements best describes sunk costs? A sunk cost is any cost that must be expended in order to complete project and bring it into operation.
Find the profitable arbitrage opportunity : Find the profitable arbitrage opportunity if the price of a one-year zero coupon bond in the market is $85. Be specific in your answer (e.g. show all cash flows
What does it mean to be human : What Does it Mean to Be Human? Please prepare a paper of at least five pages in which you take and defend a position on the question of what it means to be.
How much is the copay : Gary Tuttle has Citiwide Insurance with 100% coverage after a $25.00 copay on office visits. How much is the copay
How technology and social roles are connected : Since you have been looking at how technology and social roles are connected in this week's discussion you will take on the role of a debater on the side.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Prepare the necessary journal entries to record

Prepare the necessary journal entries to record the following transactions relating to the long-term issuance of bonds by Glendale Corp.

  What actions should the company take

It wasnt until the monthly payroll reports were sent to kens supervisor that the error was detected. Ken refused to return the four extra checks. What actions should the company take?

  Find and show the entry to establish the partnership

Show the entry to establish the partnership. Brady brings $60,000 in cash, but he is also bringing $6,000 in accounts payable from his old business.

  Calculate craigmont companys conversion costs total

Craigmont Company's direct materials costs are $4,600,000, its direct labor costs total $8,440,000, and its factory overhead costs total $6,440,000.

  Calculation of product cost and breakeven pointwakefield

calculation of product cost and breakeven point.wakefield inc. offers a cpa review course in cities throughout the

  Estimate stimulate cultural tolerance and acceptance

Outline how you needed to compromise and be mindful of people's cultural differences as you manage employees and consider strategies

  Do you know which method of budgeting is used in company

What are the differences between Top-down Budget and Bottom-Up Budget? What are each method's advantages and disadvantages?

  How do describe the key features of equipment

How do Describe the key features of equipment and software required to conduct routine financial calculations. Explain in detail with an example.

  Which of the statements is correct for pearl inc

Pearl Inc. issued $800,000 of bonds with a 10% coupon rate of interest. When Pearl issued the bonds, Which of the statements is correct?

  Determine the account balance on february

Purchases on account were $101,210. Assuming the February 28 balance of Accounts Payable was $34,000, determine the account balance on February 1.

  Explain the tax benefits of debt financing

Explain the tax benefits of debt financing. Apply the calculated AT-WACC to explain why this is or is not a viable investment for you as the Angel Investor.

  Write positive theory of accounting vs normative theory

Write the difference between positive theory of accounting and normative theory of accounting. Provide 1 example of each. write in a short

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd