100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Finance 320F Exam Study Guide with complete solutions $10.49   Add to cart

Exam (elaborations)

Finance 320F Exam Study Guide with complete solutions

 2 views  0 purchase
  • Course
  • FIN 320F
  • Institution
  • FIN 320F

Finance 320F Exam Study Guide with complete solutions Incremental Cash Flows After Taxes (ICFAT) - Answer️️ -are the periodic cash outflows and inflows that occur if, and only if, an investment project is accepted. Incremental cash flow focus on the project, not the company as a whole. Eco...

[Show more]

Preview 3 out of 21  pages

  • September 15, 2024
  • 21
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • FIN 320F
  • FIN 320F
avatar-seller
SophiaBennett
©SOPHIABENNETT
2024/2025 ACADEMIC YEAR




©SOPHIABENNETT 9/11/24 2024/2025

, ©SOPHIABENNETT 2024/2025 9:45 AM



Finance 320F Exam Study Guide with
complete solutions


Incremental Cash Flows After Taxes (ICFAT) - Answer✔️✔️-are the periodic cash

outflows and inflows that occur if, and only if, an investment project is accepted.

Incremental cash flow focus on the project, not the company as a whole.


Economic interdependencies - Answer✔️✔️-Adopting a project would change the cash

flows in other parts of the company.

Synergy - Answer✔️✔️-The positive effect where adopting the project would increase the

cash flows from existing operation.

Erosion - Answer✔️✔️-The negative effect where adopting the project would decrease

the cash flows from existing operations

Sunk costs - Answer✔️✔️-Costs that have already been incurred. As such they would not

be affected by the capital budgeting decision and are thus not incremental cash flows.

Revenue enhancing project - Answer✔️✔️-These projects introduce a new product,

improve an existing product, or involve other aspects to increase sales, such as a major

marketing campaign.

Cost reduction project - Answer✔️✔️-These projects focus on reducing costs.

Outsourcing of business functions or production, improving supply chains, employing

machine learning lead to lower costs and thus higher income.



Page | 1

, ©SOPHIABENNETT 2024/2025 9:45 AM


Corporate Social Responsibility project - Answer✔️✔️-The ExxonMobil project is an

example of corporations contributing to society. While the corporation's function in

society is to efficiently produce goods and services, corporations are expected to be

good citizens. These projects do help society, and also enhance the reputation of the

company.

Regulatory requirements project - Answer✔️✔️-Governments regulate economic activity

to protect society from harmful effects. The most cost-effective way to handle toxic

waste from a production process is to dump it into Lake Lady Bird. These projects are

undertaken because they are required.

Free Cash Flow (FCF) from assets - Answer✔️✔️-The amount of cash generated by a

company that is available to distribute to the firm's creditors and owners



Operating cash flow: is earnings before interest plus depreciation minus taxes. and, its

important to remember that these cash flows have not yet occurred--we estimate what

they would be if the project were to be adopted.



Capital spending: is the cash that must be invested in the project's capital assets to

produce the projected operating cash flow! any operating cash flow that must be

invested in productive assets is not available for the company's security holders, so the

projected capital expenditures must be subtracted from the operating cash flow.



Additions to Net working capital: Are investments in the project's short term assets. A

project may require investments in such items as accounts payable and inventory.


Page | 2

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller SophiaBennett. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $10.49. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

80202 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$10.49
  • (0)
  Add to cart