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单选题 A company receives a perpetuity of S20,000 per year in arrears,and pays 30%corporation tax 12 months after the end of the year to which the cash flows relate.At a cost of capital of 10%,what is the after-tax present value of the perpetuity
学科：F9
时间：2024-06-18 23:04:37
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题目1单选题
Which of the following is potentially a benefit to the lessee if they lease as opposed to buyA. Avoiding tax exhaustionB. Attracting lease customers that may not have been otherwise possibleC. Exploiting a low cost of capitalD. Potential future scrap proceeds
题目2单选题
SW Co has a barrel of chemicals in its warehouse that it purchased for a project a while ago at a cost of S1,000.It would cost S400 for a professional disposal company to collect the barrel and dispose of it safely.However,the chemicals could be used in a potential project which is currently being assessed.What is the relevant cost of using the chemicals in a new project proposalA. $1,000 costB. $400 benefitC. $400 costD. $Nil
题目3单选题
A professional kitchen is attempting to choose between gas and electricity for its main heat source.Once a choice is made,the kitchen intends to keep to that source indefinitely. Each gas oven has an NPV of $50,000 over its useful life of 5 years.Each electric oven has an NPV of S68,000 over its useful life of 7 years.The cost of capital is 8%.Which should the kitchen choose and whyA. Gas because its average NPV per year is higher than electricB. Electric because its NPV is higher than gasC. Electric because its equivalent annual benefit is higherD. Electric because it lasts longer than gas
题目4单选题
AM Co will receive a perpetuity starting in 2 years' time of $10,000 per year,increasing by the rate of inflation(which is 2%).What is the present value of this perpetuity assuming a money cost of capital of 10.2%A. $90,910B. $125,000C. $115,740D. $74,403
题目5单选题
Which of the following statements about NPV and IRR is accurateA. Two NPV calculations are needed to estimate the IRR using linear interpolationB. The graphical approach to IRR is only an estimate;linear interpolation using the formula is required for a precise answerC. The IRR is uniqueD. An IRR graph with NPV on the 'Y' axis and discount rate on the 'X' axis will have a negative slope
题目6单选题
SW Co has a 31 December year end and pays corporation tax at a rate of 30%,12 months after the end of the year to which the cash flows relate.It can claim tax-allowabledepreciation at a rate of 25%reducing balance.It pays $1m for a machine on 31 December20X4.SW Co's cost of capital is 10%.What is the present value on 31 December 20X4 of the benefit of the first portion of tax-allowable depreciationA. $250,000B. $227,250C. $68,175D. $75,000
题目7单选题
A lease agreement has an NPV of ($26,496)at a rate of 8%.The lease involves an immediate down payment of $10,000 followed by 4 equal annual payments.What is the amount of the annual paymentA. $11,020B. $4,981C. $11,513D. S14,039
题目8单选题
Which of the following statements is correctA. Tax-allowable depreciation is a relevant cash flow when evaluating borrowing to buy compared to leasing as a financing choiceB. Asset replacement decisions require relevant cash flows to be discounted by the after-tax cost of debtC. If capital is rationed,divisible investment projects can be ranked by the profitability index when determining the optimum investment scheduleD. Government restrictions on bank lending are associated with soft capital rationing
题目9单选题
Which of the following is a drawback of the payback period method of investment appraisalA. It is cash flow basedB. It considers the time value of moneyC. It doesn't measure the potential impact on share holder wealthD. It is profit based
题目10单选题
A new project being considered by BLWCo would require 1,000 hours of skilled labour.The current workforce is already fully employed but more workers can be hired in at a cost of $20 per hour.The current workers are paid $15 per hour on a project that earns a contribution of S10 per hour.What is the relevant cost of labour to be included in the project appraisalA. $10,000B. $15,000C. $20,000D. $25,000(2 marks)
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