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Nominal Cash Flow Quiz

Preferably, cash flows for a project are estimated as:

The following cash flows should be treated as incremental flows when deciding whether to go ahead with an electric car except:

Money that a firm has already spent or committed to spend regardless of whether a project is taken is called:

A firm owns a building with a book value of $100,000 and a market value of $250,000. If the building is utilized for a project, then the opportunity cost ignoring taxes is:

Which of the following statements is true?

The real rate of interest is 3 % and the inflation is 4%. What is the nominal rate of interest?

Real cash flow occurring in year 2 is 50,000. If the inflation rate is 10% per year, calculate nominal cash flow for year 2.

The NPV value obtained by discounting nominal cash flows using the nominal discount rate is:

A capital equipment costing $200,000 today has 50,000 salvage value at the end of 5 years. If the straight-line depreciation method is used, what is the book value of the equipment at the end of 2 years?

For project A in year 2, inventories increase by $10,000 and accounts payable by $4,000. Calculate the increase or decrease in net working capital for year2.