40. Which of the following would be considered a application
40. Which of the following would be considered a application of funds?
a) a decrease in accounts receivable.
b) a decrease in cash.
c) an increase in account payable.
d) an increase in cash.
41. All of the following influence capital budgeting cash flows EXCEPT:
a) accelerated depreciation.
b) salvage value.
c) tax rate changes.
d) method of project financing used.
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42. The estimated benefits from a project are expressed as cash flows instead of income flows because:
a) it is simpler to calculate cash flows than income flows.
b) it is cash, not accounting income, that is central to the firm’s capital budgeting decision.
c) this is required by the Internal Revenue Service.
d) this is required by the Securities and Exchange Commission.
